APA-Addis Ababa (Ethiopia) In its new report, Global System for Mobile Association (GSMA), a global organisation that represents the interests of mobile network operators worldwide said that Mobile Money in Ethiopia could add $5.3 billion to the country’s GDP.
The report entitled “Mobile Money in Ethiopia: Advancing financial inclusion and driving growth”, on Monday said the much anticipated liberalization of the telecoms market is presenting an opportunity to advance economic development in the country, including the financial inclusion of under-served populations via mobile money.
Ethiopia has notably lower financial inclusion rates than its East African neighbours. Data from Global Findex shows that less than half of Ethiopian adults had a bank or mobile money account in 2022 compared to almost 80% of adults in Kenya, 77 percent in Rwanda and 66 percent in Uganda.
The financial system in Ethiopia, including digital finance, has historically been dominated by banks and micro-finance institutions. Regulatory change from 2020 has allowed non-banks to provide mobile money services. This change is part of a broader liberalization of the economy from state-led to private sector led growth.
After liberalization, the only mobile operator in the market, state-owned Ethio-Telecom launched its mobile money service telebirr in May 2021, rapidly scaling up subscriptions.
Safaricom has also entered the market, and, in May 2023, obtained a mobile money license. In addition, the government of Ethiopia plans to privatize 45 percent of Ethio-Telecom as well as admit another mobile operator into the market.
If all goes to plan, by 2025 Ethiopia should have three mobile operators offering mobile money services.
A competitive market could be a game-changer for financial inclusion.
In Kenya, Ghana and Uganda, mobile operators have been able to leverage wide subscriber bases, large distribution networks and trust in their brand to reach a significant proportion of financially under-served populations via mobile money.
MG/as/APA