MICROCAPITAL BRIEF: M-Birr, Ethiopian Microfinance Institutions to Launch Mobile Money Service

M-Birr ICT (Information and Communication Technology), the Ethiopian subsidiary of Ireland-based M-Birr Limited, reportedly will begin a pilot operation in January to provide mobile money services in Ethiopia. M-Birr, named after Ethiopia’s currency, the birr, is reportedly modeled on Kenya’s M-Pesa mobile banking service. According to a statement attributed to Thierry Artaud, M-Birr ICT’s general manager, the firm has negotiated exclusive distribution agreements with five microfinance institutions (MFIs) in Ethiopia, which reportedly comprise 95 percent of the microfinance market in the country. The partner MFIs are: Dedebit Credit and Savings Institution (DECSI), Amhara Credit and Savings Institution (ACSI), Oromia Credit and Savings (OCSSCO), Addis Credit and Savings Institution (ADCSI) and Omo Microfinance (OMO). Mr. Artaud went on to say, “The potential for mobile services is untapped. Until now, customers who had no access to the traditional financial institutions had no other way than cash transactions. M-Birr will open new possibilities.”

Mr. Artaud reportedly noted that the piloting stage will include six retail outlets in each region for a total of 30 outlets nationally with hopes to expand the network in 18 months. However, before M-Birr can begin full operations, it must attain approval from the National Bank of Ethiopia, the nation’s financial regulator.

M-Birr’s mobile money service will depend on the network of the Ethiopian Telecommunications Corporation, a state-owned company, for data storage and transaction security. The primary investor in M-Birr is Finnfund, an investor in developing countries that is 95-percent owned by the Finnish government. Sweden’s development agency, the Swedish International Development Cooperation Agency (SIDA) also holds a stake in M-Birr.

By Lena Phillips, Research Associate

About M-Birr ICT

M-Birr ICT (Information and Communication Technology) is the Ethiopian subsidiary of Ireland-based M-Birr Limited, which was founded in Dublin in 2009. M-Birr ICT and M-Birr Limited’s exclusive focus is providing mobile money services in Ethiopia. In order to deliver these services, M-Birr has partnered with the following microfinance institutions: Dedebit Credit and Savings Institution (DECSI), Amhara Credit and Savings Institution (ACSI), Oromia Credit and Savings (OCSSCO), Addis Credit and Savings Institution (ADCSI) and Omo Microfinance (OMO). Combined, these financial institutions have 3.5 million customers and 1,000 branches across Ethiopia as of 2011.

About M-Pesa

M-Pesa is a Kenyan mobile money service. The “M” stands for “mobile,” and “pesa” means “cash” in Swahili. Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator. As of September 2012, M-Pesa serves approximately 19.2 million clients through 45,540 agent outlets.

Sources and Additional Resources:

AfricanBusinessMagazine.com Article, “Mobile Money Comes To Ethiopia”, http://africanbusinessmagazine.com/african-banker/technology/mobile-money-comes-to-ethiopia

MicroCapital.org Article, 2 July 2012: “MICROCAPITAL BRIEF: Productive Safety Net Program of Ethiopia Introduces Electronic Transfers”, https://www.microcapital.org/microcapital-brief-productive-safety-net-program-of-ethiopia-introduces-electronic-transfers/

MicroCapital.org Article, 27 June, 2012: “MICROCAPITAL BRIEF: Safaricom’s M-Pesa Mobile Money Partners with PesaPoint to Increase Financial Access in Kenya”, https://www.microcapital.org/microcapital-brief-safaricoms-m-pesa-mobile-money-partners-with-pesapoint-to-increase-financial-access-in-kenya/

MicroCapital Universe Profile: M-Birr ICT, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Birr+ICT

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