The number of M-Pesa customers in Safaricom's Ethiopian subsidiary more than tripled from 3.1 million to 10.8 million in the 12 months to December 2024, driven by increased use of the platform for airtime and data purchases and the introduction of cross-border money transfer services.
Unlike Kenya, where cash transfers and merchant payments make up the majority of M-Pesa transactions, data and airtime purchases top the list of most-used services on the platform in Ethiopia.
Cash transactions remain the dominant payment method in Ethiopia, but telcos are hoping to capitalise on the low access to formal banking services in the economy to increase the use of mobile money payment options.
“We have so far registered 10.8 million M-Pesa customers as of end of December 2024, cumulative since inception. We are continuously assessing suitable use cases to drive higher usage,” said Safaricom in an update on the Ethiopia unit for the quarter ending December 2024.
“Currently, we have 20 percent of airtime top-up being done through M-Pesa. In October 2024, Safaricom Kenya extended its M-Pesa Global service to Ethiopia, enabling seamless cross-border money transfers from Kenya to Ethiopia.”
However, the update shows that revenue from the M-Pesa operation in Ethiopia fell to Sh9.8 million in the nine months to December from Sh38.4 million in the corresponding period in 2023.
The decline in the shilling value of revenue partly reflects the negative impact of a sharp depreciation of the Ethiopian Birr during the period.
At the same time, the Ethiopian unit increased the number of M-Pesa merchants on its books to 119,500 from 43,100 a year earlier, while the number of agents rose to 29,200 from 24,900. The telco is also interoperable with multiple banks in Ethiopia, making it easier to transfer money between bank accounts and mobile wallets.
Meanwhile, the number of 90-day active customers on the telco's books in Ethiopia rose 64 percent to 7.1 million, with average revenue per user up 13 percent to Sh129.06 from Sh113.89 in December 2023.
Overall, the Ethiopian business recorded revenue of Sh6.74 billion in the period, up 40 percent from Sh4.82 billion in the nine months to December 2023.
Mobile data revenue continued to account for the bulk of this revenue, growing by 93 percent year-on-year to Sh4.
Voice revenue grew by 28 percent to Sh870.1 million, while SMS revenue increased by 115 percent to Sh60.6 million.
The telco commenced commercial operations in Ethiopia in October 2022.
Shareholders in the Ethiopian unit had contributed $2.05 billion (Sh246 billion) in capital by the end of December, with Safaricom's contribution amounting to $1.06 billion (Sh135.27 billion).
This funding by the consortium partners includes a licence fee of $850 million (Sh102.2 billion) and a $150 million (Sh18 billion) M-Pesa licence fee.
