Ethiopia is currently reviewing a bill that will allow non-financial institutions to engage in mobile money transfer. In a bid to create a more inclusive financial sector, Ethiopia’s central bank has proposed a directive that will decentralize mobile transfer services. Currently, only banks and microfinance institutions offer mobile money services.
The National Bank of Ethiopia is partnering with private players to improve the country’s levels of financial inclusion. World Bank reveals that in 2017, only 35% of its population owned bank accounts.
The bank will partner with financial institutions like banks and insurance companies allow payment issues to offer credit and savings. Moreover, the directive will also enable service providers to enroll individuals on various insurance products as well as payout pensions.
If the directive receives approval, major players like Ethio money will be able to serve the country’s vast population. The Telcom company serves approximately 41.9 million subscribers through its voice services, out of the total population of 100 million. Perhaps, Ethios’s penetration in Ethiopia’s mobile service explains why it proposed the directive.
Terms for Mobile money providers.
The directive allows registered businesses to apply for mobile money licenses for the central bank. Companies require a minimum capital of Ksh 176.7 million ($1.7 million) to apply for the permit. However, the majority shareholder of the company should not contribute more than 5% of this capital.
Also, the directive offers accounts with three different levels of transactions. According to Fortune, the first account has a ceiling amount balance of Kshs 10600, a daily aggregate of Kshs 1060. The account has a monthly transaction limit of Kshs 21,200.
Second, another account maintains a maximum float of Kshs 53,000, a daily aggregate of Kshs 7000 and a monthly limit of Kshs 88,325.
Lastly, the bank offers a wallet that provides a maximum balance of KSh88,325. Additionally, the account has a daily aggregate of KSh17,665 and a monthly limit of KSh176,650.