Fortune News | Aug 18,2024
Champagne popped and poured; and a cake was cut to celebrate another milestone for Ethio telecom, still the only active operator in the country. The state-owned telco launched its loan and savings services as it continues pushing the boundaries in the financial sector. Present to partake in the launch of the services last Friday at the Skylight Hotel were central bank Governor Yinager Dessie (PhD) (right); Asfaw Alemu (centre second row), president of Dashen Bank; and a triumphant Frehiwot Tamiru, Ethio telecom’s CEO. She has done more than any of her predecessors to make a sleepy state enterprise gain dynamic.
The latest move marks Ethio telecom’s graduation from a facilitator of transactions to a full-fledged financial services company. It now claims a piece of the pie previously reserved for commercial banks. The timing of the announcements also steals some of the thunder of Safaricom Telecommunications Ethiopia Plc, expected to begin operations this month in Dire Dawa town.
The digital financial services introduced by the state-owned telecom company, in partnership with Dashen Bank, on its Telebirr platform are mela, endekise and sanduq, which are micro-loan, overdraft and micro-saving services, respectively. The credit services are available to customers without needing collateral but based on transaction history and telecom usage. Telebirr has been integrated into a credit scoring system to measure creditworthiness based on those metrics. Within the first year of operations, its executives expect to generate 19.5 billion Br in transaction value through the services. Ethio telecom, which reported 61.3 billion Br in revenues last year, has been aggressively expanding its operations during Frehiwot’s tenure. Since the first-ever private telecom operating license was awarded to Safaricom Ethiopia, it has been in high gear. It launched Telebirr last year, building a subscriber base of 22 million, and pilots 5G network service in Addis Abeba.
Digital financial services are a new frontier that has proven lucrative to other countries’ telecom industries, a path Ethio telecom seems determined to follow. Forthcoming competitor, Safaricom, has plenty of experience, generating around half of its revenues from mobile money services on the M-Pesa platform. It is a success story in helping the unbanked access financial products. Whether it can replicate that success in Ethiopia remains to be seen.
PUBLISHED ON
Aug 06,2022 [ VOL
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