M-PESA Safaricom has signed an international money transfer agreement with Onafriq, Africa’s largest digital payments network. The partnership will help streamline remittance flows to Ethiopia. Onafriq currently operates in 40 African countries.
M‑PESA provides individuals with quick and easy financial services through a mobile phone. Users do not need a bank account, just a Safaricom sim card. Through the agreement, individuals within Ethiopia are able to receive remittances from different parts of the world through M-PESA. This is based on the authorisation received from the National Bank of Ethiopia to start the remittance service in 2023.
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Last year, the World Bank estimated that the remittances flow to countries in sub-Saharan Africa reached $54bn in 2023. This represented an increase from the previous year’s gain. This increase was driven by strong remittance growth in countries including Mozambique, Rwanda and Ethiopia. M-PESA argues that the increase is a move in the right direction but more work needs to be done. The receipt of remittances plays a crucial role in reducing poverty as well as the GDP of a country.
The collaboration allows M-PESA to tap into and leverage Onafriq’s extensive network. This connects 500 million mobile money wallets and 200 million bank accounts. Moreover, it enables domestic and cross-border disbursements and collections, card issuing and processing, agency banking, and treasury services.
Ethiopia generates more than $5bn in remittances annually
Paul Kavavu, General Manager at Safaricom Ethiopia, said: “Our goal is to make payments easier. The incorporation of international money transfer services into M-PESA serves that purpose perfectly. Ethiopia generates more than $5bn in remittances annually. This partnership will provide the Ethiopian Diaspora with an easy and fast formal channel to send money to their loved ones in Ethiopia.”
Nika Naghavi, Group Head of Growth, Onafriq, said the partnership will directly stimulate the realisation of Ethiopia’s digital transformation strategy.
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By GlobalData“We have always believed that payments should be a simple process. As simple as a phone call, connecting individuals through increased access. The agreement with M-PESA Safaricom extends our reach in Africa even further. It 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.”
