M-PESA has partnered with Onafriq, Africa’s largest digital payments network, operating in 40 African countries, to help streamline remittance flows to Ethiopia.
M‑PESA provides individuals with quick and easy financial services through a mobile phone. Users do not need a bank account, just a Safaricom sim card. Through the agreement, individuals within Ethiopia are able to receive remittances from different parts of the world through M-PESA, based on the authorisation received from the National Bank of Ethiopia to start the remittance service in July 2023.
Nika Naghavi, Group Head of Growth at Onafriq, states that the partnership will directly stimulate the realisation of Ethiopia’s digital transformation strategy. The strategy termed ‘Digital Ethiopia 2025’, places emphasis on enabling systems through digital transformation, of which digital payments form a crucial part. The country’s solution to this includes ensuring financial inclusion, innovation in the banking system and the adoption of innovative solutions.
According to the World Bank remittances flow to countries in sub-Saharan Africa reached $54 billion in 2023 – an increase from the previous year’s gain. This increase was driven by strong remittance growth in countries like Mozambique, Rwanda and Ethiopia.
While this increase is a move in the right direction, there is work to be done. The receipt of remittances plays a crucial role in reducing poverty as well as the GDP of a country.
The incorporation of International Money Transfer capability into its offering allows M-PESA to tap into and leverage Onafriq’s extensive network, connecting 500 million mobile money wallets and 200 million bank accounts. This vast reach enables domestic and cross-border disbursements and collections, card issuing and processing, agency banking, and treasury services.
Of this partnership, Paul Kavavu, General Manager at Safaricom Ethiopia, states: “Our goal is to make payments easier, and the incorporation of International Money Transfer services into M-PESA serves that purpose perfectly. Ethiopia generates more than five billion USD in remittances annually. This partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia.”
The service complements Ethiopia’s efforts to generate foreign currency inflow through formal channels, offering a safe, inclusive and reliable service to customers through M-PESA.