If the proposed rules by the
Horn of Africa nation are approved, the Safaricom-led consortium in Ethiopia
will pay $150 million (KSh18.9 billion) in licence fees to launch M-Pesa in the
populous country.
The proposed regulations that
will govern the licensing and introduction of mobile money services like M-Pesa
include the sum known as an investment protection charge.
In the draft released by the
National Bank of Ethiopia, which oversees the nation's banking industry, it is
stated that "a foreign national applicant shall produce documentation for
the payment of $150 million or equivalent in another foreign currency for
investment protection charge."
Foreign investors must pay an
investment protection charge in order to invest in companies that are only open
to domestic investors or the government.
Restricted
access
The
amount will be in addition to 50 million birrs (KSh117.81 million) that
Safaricom will have to pay in cash as paid-up capital and the amount deposited
in a bank account with restricted access.
To
debate the draft, the National Bank of Ethiopia is scheduled to meet with
representatives from Safaricom Ethiopia, the Ethiopian Telecommunication
Authority, banks, microfinance institutions, and payment system operators on
Tuesday.
Mobile
money in Ethiopia is expected to increase M-visibility. Pesa's Since its
inception in 2007, M-Pesa has been increasing its share of Safaricom's revenue
mix.
39.9%
of the telco's KSh269.86 billion ($2.1 billion) total mobile service revenue
for the year ending March 2022, or KSh107.69 billion ($853 million), came from
M-Pesa.
M-Pesa
is predicted to prosper.
With
more than 112 million residents, Ethiopia is the second-largest country in
Africa by population, and given the sizeable unbanked population, M-Pesa is
anticipated to flourish.
A
Safaricom-led consortium —which also includes Vodacom and Vodafone — was in May
granted a telecom licence in Ethiopia following a KSh107 billion ($850 million)
bid but has been unsure of what it would take to get an M-Pesa licence.
The
draft directive on licensing and authorisation of payment instrument issuers
now makes it clear that Safaricom will have to pay additional money to get a
mobile money licence.
If
the proposal is passed in its current form, Safaricom will be required to
launch M-Pesa within six months of getting the licence.
Safaricom
chief finance officer Dilip Pal said last November Safaricom was already
preparing for the launch as soon as it acquires the licence.
“I
think that’s the work that we are currently doing to make sure that our ability
to launch in time, we can do it pretty fast, that we are not waiting
sequentially to create those capabilities,” said Mr Pal.
Source; The East African
0 Comments