Africa

M-Pesa users in Ethiopia hit 3.1 million four months after launch

A picture shows the main services offered on the M-Pesa mobile app by telco giant Safaricom. (Photo: The Eastleigh Voice)

By Ibrahim Omar | Tuesday, January 30, 2024

The increased M-Pesa usage earned Safaricom Ethiopia Sh44.9 million in revenue in the period between mid-August and the end of December.

The number of users of Safaricom's mobile money service M-Pesa in Ethiopia has hit 3.1 million, underscoring the rapid growth of the service in the populous country.

Safaricom Telecommunications Ethiopia launched M-Pesa on August 15, 2023, and quickly gained 1.2 million customers within one and a half months.

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A new report by the telco shows the number of customers increased sharply in the four months since M-Pesa’s launch to 3.1 million by December 31, 2023, with some $115.3 million (Sh18.62 billion at current exchange rates) worth of transactions being made.

The increased M-Pesa usage earned Safaricom Ethiopia Sh44.9 million in revenue in the period between mid-August and the end of December.

This pushed it to overtake the revenue earned from its messaging service, which was Sh28.2 million in the nine months that ended in December.

Ethiopia had an estimated population of 120.3 million people in 2021, a vast market that Safaricom wants to tap into to grow its revenues even as it races to break even in the country.

“We are very pleased with the optimism that M-Pesa has evoked in the youthful population of Ethiopia,” said Safaricom Chief Executive Officer Peter Ndegwa. “We look forward, with great excitement, to the transformation M-Pesa will bring to financial inclusion in Ethiopia.”

Safaricom hopes the rapid uptake of M-Pesa will help the mobile payment service become a dominant revenue earner, like in its primary market, Kenya, where M-Pesa earnings have surpassed voice, data, and SMS revenue.

The company is boosting its presence in Ethiopia by increasing its network sites. By last September, Safaricom had 2,057 network sites in 22 of Ethiopia's towns and had gained more than four million subscribers to its network.

In the period to last September, Safaricom Ethiopia earned Sh1.36 billion in mobile data revenue, Sh1.97 billion in service revenue and Sh424 million in voice revenue, and had hit 2.6 million one-month active users.

Safaricom Ethiopia received a license to launch M-Pesa in May last year, seven months after commercially launching GSM services in the country.

“The M-Pesa licence will open the country to the world’s largest mobile payment system, Africa’s largest fintech, and the world’s first mobile money transfer system,” the telco said at the time.

M-Pesa catalysed financial inclusion in Kenya to 84 per cent from a low of 26.7 per cent in 2006, according to the 2021 FinAccess Survey, and generated over Sh117.2 billion ($886 million) in revenue in FY23.