Safaricom's M-Pesa and Africa's largest digital payments network, Onafriq, have signed an International Money Transfer Agreement in a move aimed at significantly boosting Ethiopia's remittance inflows.
This partnership aims to simplify and expedite the process for Ethiopians living abroad to send money back home.
Previously, Ethiopians relied on informal channels to send remittances, which often came with high fees and security concerns.
However, with the National Bank of Ethiopia granting M-Pesa permission to operate remittance services in July 2023, this partnership unlocks a secure and convenient mobile money option.
"Our goal is to make payments easier, and the incorporation of International Money Transfer services into M-Pesa serves that purpose perfectly," stated Paul Kavavu, General Manager at Safaricom Ethiopia.
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Ethiopia receives over $5 billion annually in remittances, and this collaboration provides the Ethiopian diaspora with a "fast and easy formal channel" to support their loved ones back home.
This agreement leverages the strengths of both entities. M-Pesa, known for its mobile money services accessible via a simple SIM card, taps into Onafriq's vast network.
Onafriq boasts a reach connecting 500 million mobile money wallets and 200 million bank accounts across 40 African countries.
This extensive network facilitates not only cross-border transactions but also domestic disbursements and collections, card services, agency banking, and treasury solutions.
Nika Naghavi, Group Head of Growth at Onafriq, believes this partnership goes beyond just financial transactions.
It directly contributes to Ethiopia's Digital Ethiopia 2025 strategy, which prioritizes digital transformation, with digital payments playing a key role.
Naghavi emphasizes the importance of financial inclusion, innovation in the banking system and the adoption of innovative solutions – all aspects addressed by this collaboration.
"We have always believed that payments should be a simple process," says Naghavi.
This agreement allows Onafriq to further extend its reach in Africa, solidifying its position as the continent's largest payment network.
Naghavi expresses confidence that the partnership will have a positive impact on economic growth and contribute to achieving sustainable development goals.
By offering a safe, inclusive, and reliable service through M-Pesa, this partnership complements Ethiopia's efforts to generate foreign currency inflow through formal channels.
This collaboration holds immense potential to transform the remittance landscape in Ethiopia, making it easier and faster for Ethiopians abroad to support their families and contribute to the nation's economic development.
