The mobile banking game-changer in Ethiopia
Addis Ababa, Ethiopia - New regulations will bring m-banking to Ethiopian consumers, but limits on the companies involved and how transactions must be managed could slow growth.
On 1 January 2013, the National Bank of Ethiopia (NBE) issued a long-awaited directive that allows transaction-based mobile banking for the country’s unbanked citizens.
Four major players Commercial Bank of Ethiopia, M-BIRR, BelCash and Zemen Bank‘s z-Birr are expected to begin operations later this year, making Ethiopia one of those African countries adopting this technology.; Zimbabwe continues to resist the tide of m-banking.
Bankers and analysts alike welcome the move.
“It will be transformational for Ethiopia’s economy in general and the financial services sector in particular,” says Zemedeneh Negatu, managing partner at Ernst & Young Ethiopia.
He thinks that up to 50 million people could benefit. However, he recognises that the impact is dependent upon increased mobile penetration, as Ethiopia currently has 22 million subscribers, a figure that is expected to rise to 64 million by 2015.
The regulatory framework could limit m-banking’s progress.
Paper receipts will be required for every transaction, necessitating the use of a printer and a consistent electricity supply, both of which may not be easily available in remote rural areas.
The transfer limit is 6,000 birr ($324) – other countries have a ceiling of $1,000. In addition, foreign-owned companies are disqualified from acting as agents. Read more
