Ethiopian mobile banking begins a slow expansion phase

Subject

Mobile banking in Ethiopia.

Significance

A significant increase in the roll-out of mobile banking platforms is underway. In December, the Irish-linked mobile banking platform m-Birr received regulatory approval and expects to add 13,000 users during February. The National Bank of Ethiopia's (NBE) mobile banking framework adopted in January 2013 was stymied by a 6,000-birr (295 dollar) cap on transactions and a requirement for printed receipts for transactions at branches. However, the roll-out of an agent network like m-Birr could change the sector's fortunes.

Impacts

• Mobile payments services will spur demand for telecommunications, but strain the capacity of state monopoly Ethio Telecom.
• However, compared to the experience of private-sector driven processes in other African countries, take-up will grow at a modest pace.
• The role of foreign investors is likely to remain limited to technology provision.