Dashen Bank Waives Penalties for Telebirr Borrowers Ahead of Christmas Deadline

A Christmas holiday reprieve has arrived for defaulting microcredit borrowers using Ethio Telecom’s Telebirr platform.

Dashen Bank S.C., one of four financial institutions that extend loans through the mobile money service, has announced that it will waive interest penalties for borrowers who repay their original loan amounts within the next 10 days. The offer, communicated through mass text messages sent to borrowers, applies to payments made by December 26.

“If you pay your debt by December 26, the penalty payment will be waived off,” Tuesday’s message reads. The texts also carry a warning, urging borrowers to settle their balances to avoid the consequences of ongoing legal proceedings.

The outreach marks a different tone from earlier communications. Three days ago, Dashen Bank sent a general notice informing borrowers that penalties would be waived for those who settled their debts within 15 days, directing recipients to a letter issued by the bank’s legal department. Messages sent on Tuesday were more direct, addressing individual borrowers by name and specifying both the amount of penalty being waived and the expected payment.

One loan defaulter who failed to replay his loan for – months shared the text message he received with Shega. The text reads “It is known that Dashen Bank S.C., in collaboration with Ethio Telecom, has provided a credit service for which you have an unpaid Telebirr debt of Birr xxxxx. We are currently in the process of reclaiming this outstanding debt through legal means. However, we inform you that if you fully pay off your debt by December 26, 2025, the penalty fee of Birr xxxxx will be completely waived for you. Therefore, we strongly urge you to pay the remaining debt of Birr xxxx within the given time limit to avoid legal liability.”

"The message has incentivized me to pay," the borrower told Shega. " I will do so as soon as the system updates."

Ethio Telecom, the majority state-owned telecommunications provider, launched microcredit services through Telebirr in August 2022 in partnership with Dashen Bank. The initiative expanded in mid-2023, when the state-owned Commercial Bank of Ethiopia joined the platform. Two additional lenders, Siinqee Bank and, more recently, Awash Bank, have since entered similar partnerships.

In recent months, reports of pending legal action against delinquent borrowers have surfaced, including a letter attributed to Ethio Telecom’s legal department warning of possible enforcement measures.

Since its launch, Telebirr has disbursed more than 25 billion Birr in microloans to roughly 12 million recipients, of which a significant amount was through Dashen, according to company figures. Yet despite serving more than 54 million customers, the mobile money platform accounted for just 2.5 percent of Ethio Telecom’s total revenue last year. That disparity has led some industry analysts to suggest that the service may be struggling with nonperforming loans.

For borrowers facing mounting penalties and legal uncertainty, Dashen Bank’s temporary waiver offers a narrow window of relief, one framed as both an incentive and a final warning.