Onafriq, a large digital payments network, has signed an international money transfer agreement with M-PESA Safaricom, a provider of quick and easy financial services to mobile phone users, to help streamline remittance flows to Ethiopia
M‑PESA users do not need a bank account, just a Safaricom sim card and, through the new 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.
Remittances play a crucial role in reducing poverty and increasing GDP in Ethiopia but there is still room for improvement. This was outlined by the country’s director general of Ethiopian Diaspora, Mohammed Endris, previously stated that in some countries remittances take up to 40-50% of the GDP, while the remittance sent by the diaspora to Ethiopia is 5%.
“Our goal is to make payments easier, and the incorporation of International Money Transfer services into M-PESA serves that purpose perfectly,” remarked Paul Kavavu, general manager at Safaricom Ethiopia. “Ethiopia generates more than US$5bn in remittances annually and this partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia.”
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.
Digital Ethiopia 2025
According to Nika Naghavi, group head of growth at Onafriq, the partnership will directly stimulate the realisation of Ethiopia's digital transformation strategy, known as ‘Digital Ethiopia 2025’. This 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.
Naghavi stated, “We have always believed that payments should be a simple process, as simple as a phone call – connecting individuals through increased access. The agreement with M-PESA Safaricom extends our reach in Africa even further and strengthens our position as the largest payment network on the continent. We are confident that this partnership will positively impact economic growth and the achievement of greater sustainable development goals.”
