After months of wrangling, the Ethiopian government has at last approved mobile money in the country and opened the door for banks and micro-finance institutions to provide transaction-based banking online.
The directive aims to push Ethiopia’s economy forward, which has been largely stagnant since the passing of late President Meles Zenawi in August last year.
The move has been welcomed by economists, who believe the government’s decision will help spur growth in the East African country.
“Clients of banks and MFI’s will be able to make deposits and withdrawals through their mobile phones,” the government’s directive said.
“They can also make payments to businesses or transfer money to clients using their mobile phones.”
It came after the National Bank of Ethiopia had previously turned down requests from banks in the country to allow mobile money transfers from occurring, but with mobile penetration remaining stagnant through the last quarter of 2012 and fears of an economic downturn in the country, the directive lifts previous limits to mobile banking.
With an estimated population of 91 million people, Ethiopia is Africa’s second largest nation and many analysts believe it will the next frontier for mobile phone-led financial deepening.
Ethiopia wants to introduce and bolster its telecom mobile banking sector with the country’s banks in order to make doing business and transferring money easier.