How Fintech is Shaping Ethiopia’s Economy
By Aksah Ltalo
Published on 06/23/25 10:15 AM
As Ethiopia's financial landscape spindles to a digital economy, financial technology companies (Fintechs) are fiercely competing for market dominance. With over 10 mobile payment issuers and operators, the Ethiopian market features a few standouts in registered accounts and transaction volumes.
As of 2023/24, registered users hit a whopping 110 million. Ethio-telecom's Telebirr tops the charts with 48 million active users, followed by CBE Birr at 34 million, Coop e-birr at 14 million, and Safaricom's M-Pesa trailing with five million, according to the latest report from AKOFADA.
The platform (Telebirr), launched in 2021 for saving, credit, payments, and investments, has facilitated transactions worth 390 million, integrating with 28 banks to transfer funds from bank accounts to the platform, totalling 1.84 trillion Br as of 2023/24.
For over a century, Ethio telecom held a monopoly over Ethiopia's telecom sector. The company boasts a 94.5% market share, serving over 78.3 million subscribers, while the company’s revenue surged to 91.4 billion Br last year.
"Telebirr’s monopoly has become a threat to existing and upcoming mobile service operators," keen observers such as Gashawtena Amdetsion, digital technology expert, reveal.
He stated that Ethio Telecom’s capital base and strategic tools have mirrored the substantial growth and promising trajectory of Telebirr.
Trailing behind, the Cooperative Bank of Oromia (COOP), a titan among commercial banks, is positioning itself as a forerunner among leading fintechs. Coop Bank’s digital transformation stood out, headlined by Coopay and Michu, which have expanded transaction volumes and polished its public image.
Aman Semir
Chief Transformation and Strategy Officer (CTSO)
Under the leadership of Coop Bank’s fourth president, Deribie Asfaw, the bank has focused on elevating convenience by broadening its physical and digital presence to a staggering 758 locations.
It partnered with e-birr, creating a robust mobile money gateway used by 17 million customers and agents and processing transactions worth over three trillion Birr.
Michu, an uncollateralized digital lending platform under COOP, launched with Kifya financial technology, now boasts over 1.5 million customers, facilitating over 25 billion Birr in the past two years since its debut.
Aman Semir, the bank's Chief Transformation Strategy head, states that the bank's growth stems from its unified effort to enhance digital services. He also remains optimistic that the focus on digital solutions positioned Coop Bank to benefit from an evolving payment culture.
“It has defined our growth,” he remarked.
With competition in digital products heating up, Aman emphasises the vital cooperation between banks and fintech companies to capture a larger market pie.
He keenly observes that many fintech firms falter, caught in naïve optimism, lacking capacity and clinging to outdated thinking.
"There will always be winners and losers in the game," he said.
Last year's AfricaNenda report revealed incremental progress in fostering inclusive digital payment systems in Ethiopia, with ATMs, mobile banking, POS systems, and agent banking sailing the ship.
Over the years, businesses have been enchanted by the convenience and efficiency these products weave into their services.
E Mecce Engineering & Agro-Industry Trading Plc, a medium-sized enterprise established in 2020, specialising in manufacturing feed processing machinery, is also leveraging the mobile money platform CBE-birr to streamline payments.
Facing the burden of hefty transactions, traditional banks had offered limited support for smooth payment facilitation for companies such as E Mecce.
"Digital payments have made our payments efficient," says Ephrem Hailu, the company’s general manager and major shareholder.
While Ephrem hopes to secure this financing to double production, the company has yet to dive into the digital lending waters.
"We are eyeing the market," Ephrem affirms, looking towards future opportunities.
The National Bank of Ethiopia (NBE) study reveals that the percentage of adults accessing formal financial services soared from 35pc in 2017 to over 46pc by the close of 2023.
Two months ago, a new directive emerged, amending payment issuer authorisation to elevate the digital financial ecosystem.
Including two-factor authentication, direct and indirect shareholding, instant payment systems, and interoperability, this directive seeks to enhance efficiency, inclusivity, and security in digital payments.
E Mecce Engineering & Agro-Industry Trading Plc displaying a product at an event.The directive tightens the minimum capital threshold for issuers, raising it sevenfold to 700 million Br, which payment providers must comply with in the next two years. It loosens restrictions on daily transactions, a shift keenly observed by industry experts as a major pivot toward financial inclusivity. The maximum daily balance limit has been tripled to 150,000 Br, while daily transaction limits have been raised to 300,000 Br. Person-to-person transfers can now reach up to 75,000 Br, and QR code-based merchant payments are capped at 250,000 Br.
Fintech veterans like Aman welcomed the regulators’ new push to expand digital financial inclusion. However, he noted that certain transaction limits would have been better left to financial institutions to determine based on market dynamics.
The growth in digital transactions is no short of impressive. In the fiscal year 2023/24, Ethiopia's digital transactions rose to a staggering 9.7 trillion Br, surpassing cash transactions. The National Bank report shows mobile money accounts have soared from one million in 2020 to over 128.5 million users by December 31, 2024, largely attributed to the entry of non-bank mobile money service providers.
Moreover, the rollout of the National Interoperable QR code last year boosted instant payments, improving transaction efficiency.
Emerging financial institutions like Sidama Bank, a fourth-generation bank, are also joining the race.
The bank entered the competitive banking industry in 2022, emerging from microfinance roots with ample capital, limited infrastructure, and ambitious plans to carve a niche among established private banks.
The bank's President, Tadesse Hatiya, reveals the bank is preparing to launch an omnichannel platform with digital lending capabilities and an insurance payment system powered by credit scoring and National ID integration.
"We’ll launch the product in a few weeks," he promised.