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Is Ethiopia Africa’s sleeping fintech giant? 

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By Yohannes Tsehai – Country Manager Onafriq Ethiopia

The fintech sector has been one of Africa’s biggest technology success stories. According to one report, the continent’s 678 fintech startups raised more than US$2.7 billion between 2021 and August 2023. Additionally, almost all of the continent’s unicorns (startups valued at more than US$1 billion) are in the fintech sector.

The majority of that success has, however, come from the continent’s three biggest startup markets: South Africa, Kenya, and Nigeria. In fact, 68% of African fintech startups come from these “big three” markets. But things are steadily changing. More and more countries are realising the benefits that come with an active fintech ecosystem, with a growing number of entrepreneurs in those countries also looking to enter the space.

One such country is Ethiopia. Home to more than 120 million people (making it the second most populous country in Africa), the country has many of the right ingredients to become Africa’s next big fintech giant. In addition to the country’s population size, it’s home to large numbers of unbanked people. At the same time, the country continues to experience high economic growth and rapidly increasing connectivity levels. With those and other enabling factors in place, could Ethiopia be Africa’s next big fintech giant?

A changing landscape 

A few years ago, that’s not a question many would have dared to ask. More recently, however, several things have changed, which suggests that Ethiopia is waking up to, and embracing its fintech potential.

Take telco licensing, for example. Ethiopia has previously been closed off, with only the state-owned Ethio telecom allowed to operate. But Ethiopian Prime Minister Abiy Ahmed sees the liberalisation of the country’s telecommunications sector as key to its economic future. As such, the country has opened up to other operators. In October 2022, Safaricom became Ethiopia’s second official operator.

In the ensuing months, it has built up a 4 million-strong customer base and added 1.2 million users to its M-Pesa mobile money platform. Over time, those numbers will continue to grow. And while the bidding process for a third telco license has had to be put on ice for the moment, Ethiopia’s strong economic growth means that it’s only a matter of time before one is granted.

Those telcos will play a critical role in establishing an Ethiopian fintech ecosystem too. Right now, the country has a 53.5% mobile penetration rate but mobile connections grew by nearly 18% between 2022 and 2023. With 75% of the country’s population reportedly unbanked, increasing connectivity levels is one of the most powerful ways of giving people access to financial products, both from telcos and third parties, as demonstrated by Ethio telecom’s mobile money app Telebirr having 39.3 million customers.

Another significant move is the establishment of an Ethiopian stock exchange. The exchange, which is set to open in 2024 or 2025, is designed to be a source of funding for the small and medium-sized companies that form the backbone of the country’s economy. For local fintechs looking to raise the capital they need to expand at scale, it could prove critical.

Developing supportive policies 

The Ethiopian government has also made significant strides when it comes to developing policies that encourage the growth of a fintech ecosystem. One of the most significant such policies is the National Financial Inclusion Strategy.

According to a research paper published by the GSMA, the aim is to increase financial inclusion from 46% to 70% of all adults by 2025. One of the key avenues it’s identified for doing so is by scaling digital payments through mobile money services. The country additionally aims to increase the use of digital payments from 20% of all adults in 2020 to 49% by 2025.

These policies could be dramatically transformative for both the Ethiopian economy and its people. According to the GSMA, mobile money services “could lift 700,000 people out of poverty, add US$5.3 billion to Ethiopia’s GDP, increase tax revenue by US$300 million and provide a cushion for the economic shocks experienced by almost 40% of Ethiopian households.”

There is, admittedly, a long way to go before mobile money can drive those advancements. GSMA figures show that just 4.2% of adult women and 5.1% of adult men had mobile money accounts in 2022. That said, those numbers are significantly higher than the 0.1% and 0.6% who had accounts in 2017. This suggests that, as much as there’s significant room for mobile money growth in Ethiopia, there’s a sizable and growing appetite too with increasingly accessible outlets.

Putting policy into practice 

For policy to be effective, however, it has to be matched with practices that encourage the growth of fintech. Here, too, there are encouraging signs from Ethiopia.

The government has, for instance, used the mobile banking service HelloCash to digitise social protection payments under the flagship Productive Safety Net Programme (PNSP). Additionally, it’s increasingly accepting digital payments for public services such as utilities and has mandated digital-only payments for fuel purchases. The Ministry of Trade, meanwhile, has adopted Ethio’s Telebirr services and now allows traders to pay for services like commercial registration, trade licences and trade name-related service fee payments.

In conjunction with the adoption of mobile money by government departments, its growing use by private sector players such as mid-sized brands like supermarkets, petrol stations, and SMEs should help further drive their adoption.

Growth beyond mobile money 

Of course, there are still other things that need to be put in place before Ethiopia really starts to achieve its fintech potential. Reliable interoperability, for example, remains a challenge, as does a shortage of access points and a lack of high-quality agent networks.

None of those challenges are, however, insurmountable. And, given the success that’s already accompanied the adoption of mobile money, overcoming them will help unlock other services that enable digital financial inclusion which have commenced (such as insurance, micro-financing, and savings products).

As more and more of those solutions fall into place, Ethiopia will be well on its way to unlocking its potential and becoming Africa’s next fintech giant.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Baobab Partners with NYSC to Promote Financial Literacy Amongst Corp Members

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Jollof+, a product of Baobab Nigeria, one of the finest leading financial services dedicated to supporting the financially excluded and unbanked communities in Nigeria has partnered with the National Youth Service Corps (NYSC) to promote financial literacy and increase awareness of its financial services among corps members nationwide.

This initiative, implemented in NYSC camps in Lagos, Sagamu, Abuja, Keffi, and Uyo seeks to educate young Nigerians on the importance of saving and financial literacy.

Through this partnership, Jollof+ sponsored Mr Macho and Miss NYSC events at Ogun state camp, where winners were awarded amazing items and also provided with valuable insights into how they can use the Jollof+ app to save smarter and manage their money more effectively.

Commenting on the partnership, Joy Micheal-Oti, Business Development Manager, Baobab Nigeria, said: “We believe that financial literacy is the key to financial independence, and it is something every young Nigerian should know.

“Our partnership with NYSC is our way of investing in the future of Nigeria by helping corps members understand how to save, invest, and secure their financial future with Jollof+. These are the leaders of tomorrow, and we want to ensure they are well-prepared for the future ahead of them.

In addition to promoting financial literacy, the partnership also aims to build brand awareness for Jollof+, a fast-growing digital savings platform designed to simplify how Nigerians manage their money. Corps members were introduced to the key features of Jollof+, including its high-interest savings options like Jolloflock, Ajo+, and Babybox, which are designed to cater to various savings goals.

On their part, the State Coordinator NYSC Ogun State, Mrs Nasamu Olayinka Diana said, “We are excited about the partnership with Jollof+ as it aligns with our youth development initiative, where we equip corp members for the future ahead.

When you invest in the youths, you have not wasted anything, they are indeed the best place to invest in. Thank you Jollof+ for this partnership, it will indeed have a great impact on our corp members.

With Nigeria facing rising inflation and economic uncertainty, financial literacy has never been more important. Young Nigerians, particularly corps members, are entering the workforce and facing financial challenges that require them to be financially savvy.

Jollof+ plans to continue expanding its reach to more NYSC camps across the country in the coming months, ensuring that even more young Nigerians are introduced to Jollof+ and the importance of financial literacy


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d.light Named as a Finalist for Prince William’s 2024 Earthshot Prize

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d.light, the global provider of transformational household solar products and affordable finance for low-income households, was today announced as an Earthshot Prize Finalist at the third-annual Earthshot Innovation Summit.

Founded by Prince William in 2020, The Earthshot Prize is the world’s most prestigious environmental prize designed to discover, spotlight and scale the groundbreaking solutions we need to repair and regenerate our planet.

The five eventual winners will be crowned at The Earthshot Prize Awards Ceremony in Cape Town, South Africa in early November, with each receiving £1 million in prize money to support efforts to expand the reach of their transformational products and services. This year’s shortlist was selected from a pool of close to 2,500 organisations across 139 countries.

d.light is named alongside an inspiring group of global innovators, entrepreneurs, community leaders and advocates pioneering solutions to our most pressing climate and environmental challenges.

Finalists also earn a place on the Earthshot Fellowship Programme, receiving dedicated mentorship, resources, and technical support, including access to The Prize’s Global Alliance of Partners, a robust network of the world’s largest businesses, donors, investors and environmental organisations committed to climate action.

Commenting on the news, d.light CEO Nedjip Tozun said: “We’re truly honoured to be named as a finalist for such a prestigious award, and recognition from the Earthshot Prize committee is a reflection of d.light’s efforts to support underserved communities by providing access to safe, affordable off-grid solar solutions.

“2024 has been a landmark year so far for d.light and it’s exciting to see that our impact has extended beyond the solar industry to the wider sustainability community.

“Pivotal moments have included raising USD$176 million in securitized financing in Kenya, Uganda and Tanzania, launching our customer loyalty programme and installing solar in over 1.7 million off-grid households across Africa.

“d.light is the first company in the off-grid energy sector to be nominated for the Earthshot Prize, outlining our credentials as a pioneer in this space.

Since the company was founded in 2007, we’ve developed unique and innovative ways to manufacture, distribute and finance solar projects in the developing world, allowing us to transform the lives of over 175 million people in the process.

“To be named as a finalist helps us amplify our core message that so many still live without access to a safe source of electricity, while supporting our efforts to spearhead the rollout of reliable solar solutions,” Tozun concluded.

“With this milestone, d.light moves one step closer to achieving our wider aim of transforming the lives of one billion people by 2030 by giving them access to safe, clean, affordable renewable energy.”


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Report Finds 30% More Young Gamers Targeted by Cybercriminals in H1 2024 vs. H2 2023

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The number of unique users targeted by cybercriminals using popular children’s games as a lure surged by 30% in the first six months of 2024 compared to H2 2023, according to Kaspersky experts.

 

Researchers analysed gaming risks for young players and discovered that more than 132,000 users had been targeted by cybercriminals. More details can be found in the latest Kaspersky report on cybercrimes targeting young gamers.

The most exploited children’s games

Kaspersky looked into the threats disguised as popular kids’ video games and analysed the period from July 1, 2023, to June 30, 2024.

Throughout the reported period, Kaspersky security solutions detected more than 6.6 million attempted attacks, where cybercriminals used the brands of the kids’ games as a lure.

Out of the 18 games chosen for this research, the majority of attacks were related to Minecraft, Roblox, and Among Us. According to Kaspersky’s statistics, more than 3 million attempted attacks under the guise of Minecraft were launched throughout the reported period.

Most likely, cybercriminals chose this method of attack based on the popularity of games among players, as well as the ability of gamers to use cheats and mods. Since the majority of mods and cheats are distributed on third-party websites, attackers disguise malware by posing as these applications.

Kaspersky experts believe that the higher success rates detected in 2024 can be explained by the trends observed in the recent developments of the general cyberthreat landscape.

On the one hand, following popular trends, cybercriminals launch more cunning attacks, exploiting the current agenda and crafting less obvious schemes, instead of using generic attacks.

On the other hand, cybercriminals are increasingly using AI to automate and personalise phishing attacks that are more likely to deceive young gamers. At the same time, new advanced phishing kits — pre-made templates of phishing pages — created with automated tools consistently appear on the dark web, allowing an increasing number of attackers to deploy highly effective phishing sites that mimic popular gaming platforms.

Scams on children’s favourite games

One of the most common scams in gaming is the offer to receive new skins for your character — essentially clothing or armor — that enhance the hero’s skills. Some skins are common, while others are extremely rare and, therefore, more desirable.

Kaspersky experts have found an example of a scam that uses both the name of popular game Valorant and that of the world-famous YouTuber Mr. Beast. By selecting this blogger and using his photo, the fraudsters aim to capture children’s attention and hook them into their fraudulent scam.

To receive the desired Mr. Beast skin, young users are asked to enter their login and password for their gaming account, enabling their credentials to be potentially stolen by scammers as a result.

Another popular trap is the offer of receiving in-game currency. In one of the discovered scams exploiting the Pokémon GO brand, users are asked to enter the username for their gaming account. Next, they’re asked to take a survey to prove they’re not a bot.

Once the survey is complete, they are redirected to a fake website, usually one promising free prizes or giveaways. This is where the real scam kicks in.

The scammers aren’t actually after personal data like credit card details; they’re using the guise of gaming to lure users into another hoax — one involving fake downloads, prize claims, or other deceptive offers.

The whole process is a clever way to redirect users to a different, more dangerous scam under the pretense of a legitimate verification step.

“Throughout our research, we see attacks on children are becoming a common vector of cybercriminals’ activities. That’s why cyber hygiene education and the use of trusted cybersecurity solutions are a ’must-have’ in building children’s safety in the online environment.

By fostering their critical thinking, responsible online behaviour, and a strong understanding of the risks, we can create a safer and more positive online experience for this generation of digital natives,” comments Vasily Kolesnikov, security expert at Kaspersky.

 


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