Fortune News | Oct 11,2020
The fastest-growing mobile money provider in the Somali Region, Rays Microfinance, the creator of Sahay, has partnered with Awash Bank to expand its operations in Addis Abeba and pastoralist areas of the eastern part of Ethiopia. Works to integrate the two financial institutions have been underway after the two signed an agreement on December 16, 2020.
The move enables Rays to make its mobile money platform, which allows its customers to deposit, withdraw and borrow, interoperable with the core banking solution of Ethiopia's biggest private commercial bank, which netted a profit of 2.6 billion Birr during the last fiscal year, mobilising deposits of 74.3 billion Br.
Once the integration is completed, customers of Sahay will be able to deposit, withdraw and transfer cash at any branch of Awash Bank, whose clients would also be able to do the same at the agents of the mobile money service provider and enjoy similar offerings using USSD and Android and iOS mobile applications. Customers of Awash would be also able to send money, buy goods, purchase airtime, pay bills, and access digital microloans.
Founded seven years ago by six investors with a paid-up capital of 10 million Br, Rays has been providing microfinance services before it launched its brainchild, Sahay, last year. It has quickly become one of the most preferred mobile money services in the country with more than half a million subscribers, 2,410 agents and 10,429 merchants.
"In just a year, we were able to achieve beyond our target, even reaching the unbanked population in the peripheries of Somali Region. We want to expand our presence in Addis Abeba and the pastoralist areas of Oromia, Afar, and Somali," says Abdiaziz Hassan, chief executive officer and one of the founders of Rays.
Having 466 branches across the country, Awash expects to increase its outreach in rural parts of the country, where it has almost no presence with over a fourth of its branches located in Addis Abeba.
"We have planned to move further into Eastern Hararghe, Oromia, and north. Opening branches in these areas is difficult since they are very far from urban towns where people access banking services," says Kefayalew Shiferaw, deputy chief of digital banking operations at Awash. Two-thirds of the Ethiopian population is unbanked, according to a study conducted by the World Bank in 2019.
According to Rays Microfinance, Sahay has an engine that can manage 400 requests per second, possesses a server handling one gigabyte of orders a second, and offers an app that uses a protocol compatible with 2G and 3G networks. Sahay's customers can request a non-secured loan depending on their transaction history. The loan is repaid after two weeks or one month at the most. The loan is assessed using a highly tuned machine learning tool, which allocates an accurate score.
"Besides enjoying such services, the agreement enables customers of Sahay to pay for goods at any merchant with an Awash Bank POS machine and receive remittance directly to their wallet from abroad. The money will automatically be exchanged using the current exchange rate at that time," Abdiaziz told Fortune.
Addisu Haba, a banking expert with over three decades of experience, welcomed the partnership.
"Massive branch expansion cannot be a solution for financial inclusion. To reach the unbanked population, banks have to partner with microfinance institutions and reduce the overhead costs they incur by digitising banking activities and giving equal emphasis to non-branch-based banking services," says Addisu.
Embracing mobile money is also key for a secure cash management system and increases the liquidity of banks, according to Addisu.
"Cash management is not easy, starting from printing to transporting the money. A cashless transaction using platforms like mobile money apps would not only help avoid such circumstances but would also improve their liquidity position," remarked Addisu.
PUBLISHED ON Apr 30,2021 [ VOL 22 , NO 1096]
Fortune News | Oct 11,2020
Featured | Oct 19,2019
Sponsored Contents | Jan 31,2022
Radar | Jun 26,2021
Fortune News | May 16,2020
Agenda | Dec 28,2019
Radar | Apr 09,2022
Radar | Mar 21,2020
Editorial | Dec 21,2019
Commentaries | Nov 27,2018
November 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
November 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
October 16 , 2021 . By HAWI DADHI
Residing in a country with no capital market, an organised marketplace for trading se...
August 28 , 2021 . By HAWI DADHI
The streets of Addis Abeba are as varied as they are many, although too many of them have yet to be named. From the narrow alleyways of the...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country’s most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or tw...
May 21 , 2022
There was a great deal of handshaking and patting each other on the back at the Hyatt...
May 14 , 2022
Diana Yohannes is one of those actively engaging in social media platforms with her T...
May 7 , 2022
The Ethiopian Economic Association (EEA) recently proposed the formation of a macroec...
April 30 , 2022
There is no ambiguity in the UNDP's assessment of Ethiopia’s economic performance a...
PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize
May 6 , 2019
Adulteration is getting out of hand. Consumers in Ethiopia are being left to their ow...
Or see contact page