By Brian Okoth
Safaricom, Kenya’s largest telecommunications company, has obtained the license to operate its mobile money service, M-Pesa, in Ethiopia.
M-Pesa allows clients to send or receive money using mobile technology. It also enables the payment of goods and services.
The firm’s chief executive officer, Peter Ndegwa, said the permission was granted on Thursday, and that the mobile money service will be fully operational in Ethiopia “over the next coming months”.
“The license positions us to provide essential financial services to the Ethiopian population,” Ndegwa said in Kenya’s capital Nairobi on Thursday during the release of Safaricom’s full-year financial results.
Safaricom officially launched operations in Ethiopia on October 6, 2022, one year after it began its forays into the neighbouring nation.
“The Government of Ethiopia has supported us in legislating and fast-tracking some of its plans, including telecommunications reform programme and prioritisation for investment incentives,” Ndegwa said.
So far, the company has about 2.1 million active users in Ethiopia, targeting to increase the number to 10 million in a year’s time, the CEO said.
The firm has also opened 114 distributor shops in the country, which has a population of 120 million people.
More than 13 million people in Ethiopia with a mobile phone are unbanked, the World Bank indicated in a past report.
Ethio Telecom is Ethiopia’s largest telecommunications company, with more than 55 million subscribers. At least four million have signed up for its mobile money service.
In the last financial year, Kenya's Safaricom recorded Ksh116.3 billion ($986 million) pre-tax earnings, surpassing its target by Sh1 billion ($8.5 million).
Safaricom’s Chief Financial Officer Dilip Pal said in Nairobi on Thursday that M-Pesa profits grew by 8.8 per cent due to “increased usage and growth of chargeable transactions per customer”.
The service accounted for 39.7 per cent of the firm’s service revenue, which stood at Ksh295 billion ($2.5 billion). That means M-Pesa raised about Ksh117 billion ($1 billion) in pre-tax revenue.
“Whilst we had a slowdown in business activity from the macroeconomic effects, and worsened by the election period [in Kenya] in the first half, we saw increased momentum in half two,” said Pal.
Safaricom has a customer base of 50 million people, and is ranked as East Africa region’s most valuable company by the African Financials Group.
