The Rise of Mobile Money in Ethiopia, Without the Agents

Mobile money usage in Ethiopia has surged, led by platforms like telebirr, but the same cannot be said for the agents meant to support the system. Despite the increase in agent registrations, many remain inactive, and those in operation are often ill-equipped.

In contrast, countries like Kenya built mobile money on the backs of robust agent networks. The lessons Ethiopia can (and can’t) take from Kenya reveal the importance of timing, context, and value proposition, and highlight why Ethiopia’s model may need to be rethought to define what agents should be in a digital-first future. Featured Image Credit- DAI

I opened a CBE Birr account around 2020, though I can’t quite recall why. Perhaps I just gave in to one of the persistent bank clerks who urged customers to sign up for new accounts or digital platforms. Some time later, a friend had to send me money, but he only had funds in his CBE Birr account. Reluctantly, I agreed to receive it that way. 

Uncertain about how to withdraw the money, I went to the nearest Commercial Bank of Ethiopia (CBE) branch. While they told me I could make the withdrawal there, the process was far from straightforward. I was handed a form that was different from the standard bank withdrawal slip and filled with confusing questions.

After that, I waited in line with other customers and eventually received the money. I remember thinking: if accessing funds from my CBE Birr account involves this much hassle and is no different from using a regular bank account, what is the point of having it in the first place?

This was still during the early days of mobile money in Ethiopia, when services were offered exclusively by financial institutions. As a nation, we were still figuring things out. Fast forward to today, mobile money services are now open to non-financial institutions, and telebirr has entered the market with thousands of agents. Mobile money usage has skyrocketed, but the same cannot be said for one of its core elements: the agents.

Despite the countless "telebirr Agent" signs displayed on small businesses in the capital, you're lucky to find one that actually provides the service. Since that first experience, I have visited about a dozen telebirr agents over the years, requesting cash-in or cash-out services. Only once, at an Ethio telecom customer service center, was I able to complete a transaction. Most of the businesses either did not offer the services they advertised, did not understand what I was asking, or even took offense when I pointed out the agent sign on their door.

In a country striving toward digital financial inclusion, mobile money agents are meant to bridge the gap. But are they delivering? The answer is far from straightforward. 

The Promise and Reality of Mobile Money Agents

Agent networks have played a critical role in the uptake of digital financial services in other countries. But before we can talk about their role, it’s essential to understand the ecosystem they operate in — mobile money.

Mobile money is not the same as mobile banking; it is a distinct product. Mobile money, also operated by non-bank entities like telecom companies, provides financial access without the need for a traditional bank account. It does this through mobile phones.

Mobile money has become foundational to expanding financial inclusion. It provides access to financial services for people who were previously excluded from the formal banking system. By leveraging mobile technology, it enables digital payments, savings, and credit, particularly for those who are financially underserved.

East Africa is the epicenter of mobile money, led by pioneering mobile network operators in Kenya and beyond. Telecommunications companies are good at equipping people with phones, and they have also been champions with mobile money wallets.

According to GSMA, around 108 billion transactions, totaling over $1.68 trillion, were processed through mobile money accounts in 2024, with Sub-Saharan Africa remaining the world’s most active mobile money region. 

Within the mobile money ecosystem, agents serve as the primary point of contact for account holders. They act as physical touchpoints within the communities they serve, allowing people to convert cash into digital currency and vice versa (Cash-in Cash-out), register new customers and make bill payments. 

Mobile money agents earn commissions based on the volume and value of the transactions they facilitate. These commission structures vary by service provider and are designed to incentivize agents for their role in maintaining and growing the mobile money network.

Agents often operate other types of businesses alongside mobile money services. These may include local shops, kiosks, post offices, or dedicated agent outlets. Beyond facilitating transactions, agents have played a vital role in building trust and educating users about mobile money.  In 2024, mobile money agents in Kenya facilitated transactions worth KES 8.7 trillion ($67.3 billion), highlighting the growing reliance on mobile money services in the country.

Ethiopia, inspired by its neighbors, turned its attention to mobile money as a tool for driving financial inclusion about five years ago. While mobile banking services were first piloted in Ethiopia in 2015 under a bank-led model, they remained limited in scale. Regulatory reforms in 2020 allowed non-bank organizations to offer mobile money services for the first time.

Ethio telecom launched its mobile money service, telebirr, in 2022. Safaricom entered the Ethiopian market in 2022 and received its mobile money license in 2023. Meanwhile, Kacha and Yaya Wallet remain the other two players in the sector to date.

Since then, mobile money has experienced explosive growth, driven largely by telebirr. Between the 2019/20 and 2023/24 fiscal years, the total number of mobile money accounts has soared by 1,238% to reach 107.5 million. 

The number of mobile money agents also rose during this period, increasing by 1,726%, from 22,725 to 415,084. It is important to note, however, that this growth in agent numbers is also predominantly the result of telebirr and does not necessarily reflect active agents. Ethio telecom rapidly leveraged its existing airtime distribution network to onboard mobile money agents and had around 216,000 agents as of June 2024.

In the early days of telebirr, industry insiders say banks were quickly alarmed by the sheer volume of money flowing out of their customers' bank accounts and into telebirr wallets. However, the concern over capital outflow, which banks had spent years and resources to attract, may have been somewhat misplaced.

While many users transferred money from their bank accounts to telebirr, banks later observed that most of the funds injected into telebirr wallets eventually flowed back into the banking system. Effectively, although some of the funds remained in telebirr wallets as e-float, much of the money was not withdrawn at agents but instead returned to bank accounts.

Mobile money agent transaction figures further support this reality. In 2024, the average number of transactions an agent made in the year was just 314, which equates to fewer than one transaction per day.

Although detailed figures on the types of transactions are unavailable, I suspect most agent transactions are cash-in transactions. In a country where payment for many government services has been mandated via telebirr, it is likely that most of these agent transactions are made by individuals at payment locations who require assistance from telebirr agents to complete their service payments.

During the 2023/24 fiscal year, agent transactions accounted for only 17.04% of total mobile money transactions. This figure highlights an important insight: while mobile money is distinct from mobile banking in concept, in Ethiopia, it is being used much like mobile banking or as ‘payments-as-a-platform’. Furthermore, this shows that it has not developed into an independent ecosystem capable of operating without relying on traditional banks. This gap is largely due to the limited role mobile money agents are playing, especially when compared to countries like Kenya, where agents are central to the system’s success.

Here, it is essential to acknowledge the potential of mobile money agents in Ethiopia. In a country where account ownership remains low, mobile money agents can help bridge the financial access gap.

In rural communities, agents can serve as vital access points, reaching people where formal banking services are limited or nonexistent. According to the World Bank Global Findex in 2022, only 46% of Ethiopia’s population has access to a bank account. In this context, the presence of mobile money agents in rural and hard-to-reach areas can play a critical role in advancing financial inclusion.

Their importance is further highlighted by the concentration of banking infrastructure in urban centers. Nearly a third of Ethiopia’s 12,476 bank branches are located in the capital. Additionally, about 47% of ATMs and 77% of POS machines are estimated to be in Addis Ababa and often positioned near bank branches, according to the National Bank of Ethiopia.

However, before evaluating what’s working and what’s not—or attempting to replicate models from countries like Kenya—we need to examine Ethiopia’s mobile money agent landscape through a multidimensional lens.

Behind Kenya’s Success

When M-Pesa launched, opening a bank account in Kenya was not simple, and it still isn’t as straightforward as it is in Ethiopia. To open a bank account, individuals typically need a valid national ID and proof of address. In some cases, banks may also require reference letters from existing customers or recognized institutions.

Furthermore, around eight years ago, Kenya formally mandated the presentation of a KRA PIN (Kenya Revenue Authority Personal Identification Number) for all new bank accounts, adding yet another layer to the onboarding process. These documentation requirements have partly made bank account opening in Kenya not an easy task for the average citizen.

In contrast, mobile money platforms, with their relatively light KYC requirements, have emerged as a far more accessible and convenient alternative. 

In addition, the success of M-Pesa was not solely the result of its technology. It was the outcome of a confluence of unique environmental, cultural, and regulatory conditions. Launched nearly two decades ago, M-Pesa arrived in Kenya just six years after Ethiopia installed its first ATM—a telling contrast in financial infrastructure.

Many of the mobile money features we now take for granted had to evolve over time. Services such as signing up new users, sending money, bill payments, and cash-in/out transactions all required human effort and a robust agent network to deliver them efficiently to millions of users.

What drove the rise of M-Pesa and mobile money agents wasn’t just technological innovation; it was the timely delivery of a solution that directly addressed pressing economic and social realities

On the other hand, Ethiopia embraced mobile money much later, at a time when other digital platforms and use cases had already evolved. Imagine being able to walk into your neighborhood shop, which also functions as a mobile money agent, to pay for utilities like electricity back in 2015. That would have been monumental for the role and relevance of mobile money agents. Instead, we find ourselves in 2025, where utility payments have already been integrated into nearly all digital payment platforms.

Today, mobile money accounts in Ethiopia support self-registration, further diminishing the traditional role of mobile money agents. As the figures above indicate, agents are also infrequently used for core services such as Cash-In/Cash-Out (CICO) transactions.

Although Ethiopia’s mobile money journey is still in its early stages, this appears to reflect the broader evolution of the industry. Mobile money is increasingly shifting toward a digital-first, 'payments-as-a-platform' model. This trend is also documented in countries with mature agent networks. According to the GSMA, active agents in Sub-Saharan Africa processed approximately $2,000 less in monthly Cash-In/Cash-Out (CICO) transactions in 2021 compared to 2016.

Adding to this shift is the weak business case for mobile money agents, particularly in Ethiopia. The commission structure heavily favors airtime sales over CICO services. For instance, a telebirr agent earns 5% commission on Electronic Voucher Distribution (EVD) for airtime and potentially more if sold via the telebirr app. In contrast, the agent receives just 5% of a 1,000-birr (~$7.5) CICO transaction, which is ten times lower than the commission they would earn on an airtime sale of the same amount.

Liquidity challenges present yet another hurdle for agents. Many cite their inability to predict client demand, limited access to rebalancing points such as banks, and insufficient working capital as key barriers to running a profitable operation. These constraints make it difficult for agents to manage liquidity effectively and serve customers reliably.

Building for Ethiopia

Ethiopia must approach the agent model with a clear understanding of its current reality. Mobile money agents undeniably hold significant potential, as demonstrated in other countries, to reach the underserved. However, the landscape has evolved, and so too must our expectations. 

We must rethink what agents can and should be in Ethiopia. Their value proposition needs to be reassessed in light of emerging use cases, digital-first strategies, and sustainability challenges such as low commissions and liquidity constraints.

Before making definitive judgments about whether mobile money has succeeded or failed in Ethiopia, a deeper, multidimensional evaluation is necessary. This means moving beyond surface-level metrics to understand the underlying dynamics: who can be served, how they can be served, and what barriers remain. With this approach, the answer can take many forms.