The number of M-Pesa users enrolled by Safaricom’s Ethiopia unit has nearly tripled in four months to 3.1 million with Ksh18.5 billion ($115.3 million) worth of transactions, offering hope for success in the populous country.
The latest quarterly update showed that Safaricom Telecommunications Ethiopia closed in December 2023 with 3.1 million M-Pesa users.
Safaricom’s Ethiopia subsidiary launched the mobile money service on August 15 last year.
“We are very pleased with the optimism that M-Pesa has evoked in the youthful population of Ethiopia, and we look forward with great excitement to the transformation M-Pesa will bring to financial inclusion in Ethiopia,” said Safaricom chief executive Peter Ndegwa.
At 3.1 million, Safaricom’s subsidiary in Ethiopia has nearly tripled its mobile money customer base given that it had 1.2 million users at the end of September. The increased usage has also seen the value of transactions rise over six times to Ksh18.5 billion from Ksh3 billion ($18.7 million) at the close of September.
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The Ethiopia unit has increased active M-Pesa merchants from 12,400 at the end of September to 43,100 at the end of December, coming in the period the volume of transactions more than quadrupled from two million to 9.2 million.
The increased M-Pesa usage earned the Ethiopia unit Ksh44.9 million ($279,750) as revenue in the period between mid-August and the end of December, to overtake messaging service which earned the telco Ksh28.2 million ($175,700) in nine months ended December.
The telco is now interoperable with nine lenders including Commercial Bank of Ethiopia and Dashen Bank, Bank of Abyssinia, Awash International Bank, Co-operative Bank of Oromia, Abay Bank, Hibret Bank, Berhan Bank, and Bunna Bank for M-Pesa to bank transactions.
Safaricom has seen good traction in the Ethiopia business, with nine months to December subsidiary revenue coming in at Ksh4.82 billion ($30 million)—nearly triple from the Ksh1.68 billion ($10.5 million) earned in the financial year ended March 2023.
As at the end of December last year, the telco had 2,242 base stations, about 1,252 being own-built, covering 33 cities including large and medium towns. This represents 33 percent of population coverage.
Safaricom says it is keen on densifying connectivity to improve quality and win more customers. It plans a capital expenditure of between Ksh40 billion and Ksh45 billion in the current financial year ending March 2024.
The telco launched commercial operations in Ethiopia in October 2022. Shareholders of the Ethiopia entity had contributed $1.614 billion (Ksh261.47 billion) by the end of December, with Safaricom’s contribution amounting to $834 million (Ksh135 billion).
