The news:
- Onafriq, a digital payments service, and M-PESA, the Vodacom and Safaricom-owned mobile phone-based banking services, have signed an International Money Transfer Agreement.
- The partnership will see both fintechs collaborate to streamline remittance flows into Ethiopia.
- According to the agreement, Safaricom, which obtained the Payment Instrument Issuer Licence from the National Bank of Ethiopia in 2023, can now assist Ethiopians in receiving remittances via M-PESA, a mobile money transfer service.
In a briefing at the first-ever International Day of Family Remittances in the East African nation in 2023, Mohammed Endris, the Director General of the Ethiopian Diaspora, stated that remittances make up to 50% of the GDP in some countries.
According to the World Bank, remittance flows into sub-Saharan Africa stood at $53 billion in 2022, indicating the immense contribution of African immigrants to their home countries.
However, Endris also stated that the diaspora sent home to Ethiopia accounts for only 5% of the country’s GDP and that they are working to double it in the next five to seven years.
The new collaboration between Onafriq and M-PESA is expected to improve the remittance rate in the country. Ethiopians living abroad sent $4.2 billion in remittance to their country in 2022.
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