Safaricom, the largest telecom company in East Africa, has paid $150 million for a license to offer its M-Pesa mobile money service in Ethiopia. This move allows Safaricom to compete with Telebirr, the state-owned mobile money service. Despite the challenges and a drop in earnings, Safaricom aims to replicate the success of M-Pesa in Kenya in the Ethiopian market, which has a population of 120 million.
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Ethiopia: KCB shortlisting possible takeover candidates
Kenyan lender KCB Group is considering purchasing shares from one of Ethiopia’s commercial banks rather than opening a branch or subsidiary. The bank already has a representative office in Addis Ababa and has been shortlisting banks based on their technological progress. The bank has acquired banks across East Africa in recent years, including Bank Populaire du Rwanda and Trust Merchant Bank. KCB Group reported a 19.5% increase in profit after tax from 2021 to 2022, reaching KSH40.8bn ($308m).
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Ethiopia: Awash Bank partners with Ugandan fintech to offer microloans
Ugandan fintech firm, Service Cops, has partnered with Ethiopia’s Awash Bank to enable about 12 million customers to access digital microloans. The deal will see the roll-out of instant microloans initially offered to Awash Bank customers and gradually extended to non-bank customers. Service Cops is the first Ugandan-based fintech to operate in Ethiopia and is one of a few Ugandan fintechs operating outside Uganda.
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Ethiopia: Tigray residents still strapped for cash
Banks in Tigray are facing a cash shortage after the central bank dispensed 5 billion birr to the region in February. Traders and the wealthy reportedly withdrew all their money in cash in the first two weeks, leaving residents unable to access cash services due to a lack of funds. Transactions in Tigray are made solely in cash due to mistrust in banks and fears they may shut down again. Brokers are said to be hoarding cash and charging additional fees for people to access it. Residents complain that banking services have returned to pre-dispensed levels.
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Ethiopia: Wegenfund and Bank of Abyssinia launch business crowdfunding platform
Wegenfund, the Ethiopian crowdfunding platform, has expanded its services to support entrepreneurs and small businesses. The platform was initially launched in December 2021 to provide fundraising tools for charities, religious organisations, and individuals with medical emergencies. Wegenfund offers two types of crowdfunding, namely a donation-like model and a rewards-based model. The platform plans to incorporate debt and equity crowdfunding in the future. The launch of Wegenfund for startups/businesses was announced on March 9, 2023, during a virtual event attended by panellists, startups, entrepreneurs, and invited guests.
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Ethiopia: Cash remains scarce in post-war Tigray region
The five billion birr ($116 million) transferred from the National Bank of Ethiopia to banks in Tigray was reportedly fully paid out within a week. However, a shortage of cash has prevented reopened branches in Tigray from offering full services to customers. While the Commercial Bank of Ethiopia distributed the largest portion of the funds, many of its branches have stopped paying out money due to the cash shortage. Some district managers have expressed concern over an illegal cash flow among the community and that the situation will be a big challenge for banks if it is not addressed.
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Ethiopia: Safaricom prepares launch of M-Pesa mobile money service
Safaricom, the Kenyan mobile network operator, is preparing to launch its M-PESA mobile money service in Ethiopia by April 2023, four months after receiving approval from the Ethiopian government. With a population of around 120 million people and a mobile penetration rate of 57%, Safaricom CEO Aanwar Soussa believes Ethiopia presents a great opportunity to grow the business to the level seen in Kenya in 10 years. M-PESA is already available in seven African countries and has more than 29.5 million active users.
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Ethiopia: Ministry of Defense preparing establishment of army bank
The Ethiopian Defense Foundation and the Ministry of Defense plan to establish the country’s first army bank, according to the State Minister of Defense, Martha Luwiji. The feasibility study has been completed, and the army foundation is preparing for the bank’s establishment. The government recently increased the minimum paid-up capital requirement for a new bank to five billion birr, and it is not yet clear whether the Army Bank will offer shares to the public or limit shareholders to institutional stakeholders.
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Ethiopia: New NBE governor lays out priorities for his tenure
The newly appointed governor of the National Bank of Ethiopia (NBE), Mamo Mihretu, has outlined his priorities to revive the country’s economy. The governor’s first priority will be to stabilize prices and the foreign currency market through monetary mechanisms and the second priority is to achieve financial stability. The central bank’s ability to control inflation has been hindered by the 30% inflation rate that has persisted for over a year, though the governor is optimistic about the 7.3% economic growth expected this year. The rise in investments in Treasury bills, increasing loans by commercial banks, and the growing deposit base are all positive signs for the economy.
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Ethiopia: Government sends cash to banks in war-torn Tigray region
The Ethiopian government is sending over $90 million to Tigray and restoring banking services to the war-torn region. National Bank has started sending 5 billion Birr to Mekele, and Ethiopian Airlines has increased flights to the region from 3 to 5 per day. This follows a peace deal agreed in November to end the two-year conflict between the federal government and the Tigray People’s Liberation Front. The TPLF agreed to disarm and return federal government control in exchange for access to Tigray. Some aid deliveries have resumed since the deal.
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Ethiopia: CBE continues its growth
The Commercial Bank of Ethiopia recorded a profit of Birr 13 billion and collected Birr 58.7 billion in revenue over the past six months. The bank’s assets reached Birr 1.2 trillion and it opened 55 new branches, bringing its total number to 1,879. CBE also acquired USD 1.7 billion in foreign currency, exceeding its target for the period, and saw an increase in ATM and mobile banking users to 8.8 million and 6 million, respectively. The bank had a profit of Birr 27.5 billion in the 2021/2022 fiscal year.
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Ethiopia: Bank of Abyssinia modernizes its software platform
Newgen Software has partnered with Bank of Abyssinia to automate the loan origination process for its retail and small to medium enterprise loans. The platform, NewgenONE, will streamline loan processing, disbursement, and tracking with business rule engine, document management, and workflow management capabilities. The solution will be used in more than 750 branches in Ethiopia and will allow the bank to respond faster to customer requests and digitize its loan process, enhancing the overall customer experience.
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Ethiopia: Financial liberalization won’t be an easy process
Ethiopia is seeking to open its banking sector to new entrants, but the process will not be easy. The country’s central bank has imposed strict regulations to ensure stability, including requirements for minimum capital and a ban on microfinance institutions. In addition, state-owned banks still dominate the market, which may make it difficult for new entrants to compete.
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Ethiopia: CBE launches remittance app
Commercial Bank of Ethiopia has launched Ethio Direct, a digital remittance app for the Ethiopian diaspora in Canada, Israel, USA, Italy, South Africa, Sweden, UAE, UK, and Saudi Arabia. The service allows users to send dollars to Ethiopia with international payment cards, from $5 to $1,000, and is available for download from the App Store and Play Store.
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Ethiopia: Omo Bank continues growth
Omo Bank, which transitioned from a micro finance institution to a bank in June 2020, has grossed Birr 77 million in profit over the past six months, with a capital of Birr 12 billion and 232 branches. The bank is opening branches in various regions of Ethiopia to expand its reach.
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Ethiopia: Mamo Mihretu appointed NBE Governor
Ethiopia has appointed Mamo Mihretu as the new governor of the country’s central bank. Mihretu, who is currently the governor of the National Bank of Ethiopia, will take over from Yinager Dessie, who has been in the role since 2013. Mihretu’s appointment comes as the country’s economy is facing significant challenges, including high inflation, a devalued currency and a large trade deficit.
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CBE expands digital offering
The Commercial Bank of Ethiopia (CBE) has signed an agreement with Seregela to collaborate on payment systems, enabling customers to make payments using CBE card, mobile banking, or CBE Birr. They also launched an application that allows users to pay for purchases within a month of the date of purchase. CBE facilitated Birr 2 trillion using its digital channels in the past year and has 1838 branches and 35 million customers, facilitating 20 million transactions per month.
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Wide-ranging interview on financial sector reform in Ethiopia
On entry of foreign banks: Local banks in Ethiopia are worried about competition from foreign banks, but the National Bank of Ethiopia will open the sector gradually, allowing only a limited number of foreign banks and limiting the number of branches and management involvement to protect local banks. The big international banks are not expected to enter the market as the Ethiopian market is considered too small for them. Most of the foreign banks that will enter will be African and all laws and restrictions applied to local banks will also apply to foreign banks which may discourage foreign banks from entering.
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Development Bank of Ethiopia Says It Will Not Finance Government Projects
The Development Bank of Ethiopia has announced that it will not be financing any government sector in the 2022/2023 fiscal year. The bank will allocate Birr 30bn for approval and Birr 24bn for disbursement to private investments in agriculture, industry, small and medium enterprises. The bank has been making an annual profit of Birr 4bn for the past two years and its capital has reached Birr 37bn.
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DBE increases funding for industrialization drive
The Development Bank of Ethiopia has increased funding to the private sector in an effort to accelerate the country’s industrialisation, according to its President Yohannes Ayalew. The bank approved 22 billion birr ($564m) in 2020 and plans to approve 30 billion birr in 2021, with a disbursement of 24 billion birr. Ayalew added that the bank’s profits were around 4 billion birr per year for the past two years. The bank’s capital has risen from 2 billion birr to 37 billion birr, he said.
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Digital Equb: Modernizing Ethiopia’s revered socio-economic asset
Ethiopian tech-startup Digital Equb has developed an app that modernises the country’s traditional rotating saving and credit scheme, known as Equb. The app enables people to become members of the scheme without being physically present and enables contributions to be paid through mobile banking or telebirr. Digital Equb’s CEO said the app has been downloaded by more than 7,000 people, but only 400 have completed the necessary registration. The platform charges a service fee of between 2% and 5% depending on the amount of money collected after a lottery draw.
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Ethiopia: Shirshir Addis and Anbessa International Bank Agree to Work Together
Shirshir Addis Business Group and Anbessa International Bank have agreed to collaborate on financial and investment activities, as well as share knowledge and skills. Shirshir Addis is a sister company of Arif Pay Financial Technologies and exports coffee and sesame, while also importing cooking oil, textiles, canned foods, and vehicles. Anbessa Bank currently has 280 branches nationwide and a paid-up capital of BIRR 2.6 billion.
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Ethiopia: Tsedey Bank Says Its Total Asset is Birr 44 Billion
Tsedey Bank is aiming to increase its total assets to BIRR 65 billion within the next five years, according to a statement made during the bank’s first shareholder meeting in Bahir Dar. The bank began operations in September 2022 with a subscribed capital of BIRR 11 billion and a paid-up capital of BIRR 7.8 billion, and had 148 branches at the time. Tsedey Bank was originally launched as a rural credit service in 1996 with BIRR 3 million, before becoming a microfinance institute, Amhara Credit and Savings Institute (ACSI), in 1997.
Categories: Banks