Safaricom’s popular mobile money service, M-Pesa has signed a groundbreaking agreement with digital payments network Onafriq to facilitate international money transfers to Ethiopia. This partnership aims to streamline remittance flows and cater to the growing demand for cross-border transactions in the East African nation.
As stated by Paul Kavavu, General Manager at Safaricom Ethiopia, “Our goal is to make payments easier, and the incorporation of international money transfer services into M-Pesa serves that purpose perfectly. Ethiopia generates more than five billion USD 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 Agreement’s Impact on Safaricom Ethiopia’s Growth
Safaricom Ethiopia, the subsidiary of the Kenyan telecom giant, is reported to be on track to surpass its parent company’s operations in the next few years.
This agreement with Onafriq is expected to catapult the subsidiary’s growth, providing a significant boost to its already promising trajectory.
Under the agreement, Safaricom customers in Ethiopia will receive remittances from different parts of the world through M-Pesa, based on the authorization the company received in July 2023 from the National Bank of Ethiopia to start the remittance service.
M‑Pesa allows Safaricom SIM card holders to transact through a mobile phone without the need for a bank account. The incorporation of international money transfers into the service enables M-Pesa to tap into Onafriq’s extensive network, which operates in 40 African countries and connects 500 million mobile money wallets and 200 million bank accounts.
Onafriq’s Reach and Impact
Onafriq, formerly known as MFS Africa, is a major African fintech company focused on digital payments. They boast a network connecting over 500 million mobile money wallets and 200 million bank accounts across 40 African markets.
This makes them a one-stop shop for businesses looking to tap into the African digital payments market.
Nika Naghavi, Group Head of Growth at Onafriq, emphasized the significance of this partnership, stating, “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.”
Aligning with Ethiopia’s Financial Objectives
The introduction of international money transfer services through M-Pesa complements Ethiopia’s efforts to generate foreign currency inflow through formal channels.
According to the latest quarterly update, Safaricom’s Ethiopian operations closed in December 2023 with 3.1 million M-Pesa users, with transactions worth Ksh18.5 billion ($115.3 million), offering hope for success in the populous country.
This partnership between Safaricom’s M-Pesa and Onafriq represents a significant step toward facilitating cross-border financial transactions and fostering economic growth in Ethiopia and the broader African continent.
