Arifpay Launches MFI Switch and Wallet as Sector Pushes Toward Digital Services

Arifpay, a four-year-old financial technology company has unveiled two new products designed to help microfinance institutions reduce cash handling risks and transition to real-time digital services. The announcement was made at the Arif Microfinance Summit held at the Deolopol Hotel, co-organized in partnership with the Ethiopian FinTech Industry Transformation Forum (ETIFT).

The first product, the Arifpay MFI Switch, provides a centralized infrastructure linking MFIs to the national payment system. It is intended to replace manual, cash-based operations with automated digital processing for transactions, savings and loan disbursements. The second product, the Arifpay Digital Wallet, offers clients a mobile interface to receive loans, make repayments and manage accounts digitally, particularly targeting users new to formal financial services.

Arifpay CEO Rediet Tsigeberhan said MFIs have long been cut off from the benefits in the evolution of digital finance tools. He hopes to see the new tools play a major part in reducing reliance on cash across MFI's and help them achieve "unprecedented" scale.

"The switch is a massive key in unlocking this potential," Rediet said.

At the end of June 2024, Ethiopia’s microfinance sector, consisting of 56 institutions with a combined 1,138 branches, accounted for 1.8 percent of the country’s total financial sector assets, which stood at just over 3.4 trillion Birr. The sector showed strong profitability, with total income rising 39.4 percent to 8.9 billion Birr while expenses grew only 13.4 percent to 5.9 billion Birr, resulting in a net income of 3.0 billion Birr, 148.5 percent higher than the previous year

The launch of the MFI tools comes as Arifpay which was established with 271 million Birr paid-up capital expands its service offerings from it's historical role as a payment operator. The company's service portfolio now includes 13 offerings such as e-commerce tools and online merchant platform.

Two weeks earlier, the company announced plans to deploy 10,000 new point-of-sale terminals to small and medium-sized businesses across the country. The rollout, supported by financing from Visa and hardware supplied by AVICOM, aims to address the limited digital payment options available to merchants and improve interoperability in a fragmented market.