Verbatim | Oct 31,2020
Nov 27 , 2021
By YARED SEYOUM ( FORTUNE STAFF WRITER )
The rank of microfinance institutions (MFI) joining a national payment system is swelling following three MFIs showing strong interest in acquiring shares with EthSwitch S.C.
The three MFIs joining EthSwitch as shareholders serve close to 1.5 million customers; EthSwitch allows their clients to complete transactions with member banks. EthSwitch was incorporated in 2011 with an equity of 12 million Br raised from all the banks. Recently established banks – ZamZam, Hijra and Goh – have also become shareholders.
Rays Microfinance, Addis Credit & Saving Institution, and Oromia Credit & Savings have finalised the requirements to join EthSwitch, such as having a settlement account with the National Bank of Ethiopia (NBE) or partnering with a bank that does. However, buying shares remains optional.
Somali Microfinance was the first MFI to get accepted by EthSwitch in May this year after acquiring 1,035 shares at a par value of 1,000 Br. Not all financial institutions have joined EthSwitch, a reason for the directors of EthSwitch to decide how to accept new members moving forward, says Fikru Woldetensie, director of marketing and innovation of EthSwitch.
Last September, the three MFIs began the process, reaching the integration phase recently, where their core systems are linked with EthSwitch.
These are part of the 41 MFIs operating in the country with 52.4 billion Br in aggregate deposits, a 17.2pc increase from the previous year. Eleven of these are public-owned, including Addis Credit and Oromia Credit & Savings.
The microfinance institutions will also benefit from the interbank transfer system EthSwitch launched last month. They can issue debit cards to their customers using the operator's system, which it avails to any member without a switch system of its own. Six commercial banks have a switch system, while six others use a shared platform operated by Premier Switch Solutions, a company incorporated by banks including Awash, Hibret, and Nib.
There were close to 5,000 ATMs, 10,000 PoS terminals and 15 million card users in Ethiopia as of June 2020, a report from EthSwitch reveals.
MFIs have the advantage of using an extensive network of ATM and point of sale (POS) machines that they do not have to invest in, say experts in the industry. Kinfemicheal Yibkaw, a digital financial services expert, is one of these experts who believe EthSwitch's infrastructure offers the clients of these MFIs a range of additional transactions.
"The most important benefit we get from joining EthSwitch is for our customers to withdraw money from any ATM easily," said Damtew Alemayehu, CEO of Addis Credit, established in 2001.
Addis Credit & Saving, serving 250,000 customers, has met all the requirements to join EthSwitch, Damtew told Fortune.
Addis Credit is growing to a commercial bank with a paid-up capital of nearly four billion Birr, rebranding itself as the 'Bank of Addis'. Oromia Credit, serving 700,000 customers, is also preparing to join the industry as 'Siinqee Bank' with a paid-up capital of seven billion Birr.
Rays Microfinance has progressed farthest in its bid to integrate with EthSwitch. Established in June 2014 by six investors with a paid-up capital of 10 million Br, Rays is also expanding on its success in the digital finance space through its mobile money service, Sahay. It is a platform launched in February last year, enabling customers to deposit, transfer and withdraw cash. Sahay has onboarded close to 12,000 merchants and 2,400 agents during its first year of service. The majority of its 600,000 users reside in the eastern parts of the country.
PUBLISHED ON Nov 27,2021 [ VOL 22 , NO 1126]
Verbatim | Oct 31,2020
Fortune News | Apr 03,2021
Radar | Jul 09,2022
Fortune News | Jan 21,2023
Fortune News | Mar 14,2020
Radar | Aug 24,2019
Radar | Dec 29,2018
Exclusive Interviews | Jan 05,2020
Radar | Sep 26,2021
Radar | May 20,2023
Feb 10 , 2024 . By MUNIR SHEMSU
In his last week's address to Parliament, Prime Minister Abiy Ahmed (PhD) painted a p...
Jan 7 , 2024
In the realm of international finance and diplomacy, few cities hold the distinction...
Sep 30 , 2023 . By AKSAH ITALO
On a chilly morning outside Ke'Geberew Market, Yeshi Chane, a 35-year-old mother cradling her seven-month-old baby, stands amidst the throng...
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But he also has the unf...
Africa could be the largest source of global economic growth over the next half-century. But during the same period, the continent could als...
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 two...
Feb 17 , 2024
In the vast auditoriums of Addis Abeba, far from the era when flamboyant figures like...
Feb 10 , 2024
In a last week session before Parliament, Prime Minister Abiy Ahmed (PhD) was seen ad...
In a world increasingly attuned to the nuances of data reliability and its implicatio...
Jan 27 , 2024
Christopher Clapham, professor emeritus of Cambridge University and an expert on Ethi...
My friend, who is a remarkable woman and once an orphan, is now a symbol of financial and career success. But her deepest aspiration was sim...
Lately, I have embarked on inquiries regarding the pricing structures of various service providers. The m...