Driven by the goal of becoming a leading digital solutions provider, Ethio Telecom has launched a telebirr-based digital financial marketplace that enables banks, microfinance, and insurance companies to make their financial products accessible and reach over 40 million users.
The news, which was announced yesterday, December 21, 2023, also includes the development of a digital securities trading platform.
According to Ethio Telecom the digital financial marketplace is based on a credit scoring system that uses AI and customer-centric data analysis to evaluate credit worthiness without the involvement of collateral.
“The Digital Financial Marketplace provides a unified platform for financial institutions to offer microfinance services, including microcredit, saving, and insurance services, to their customers at competitive prices,” reads a statement shared by Ethio Telecom.
Ahadu Bank, Siinqee Bank, Enat Bank and Awash Bank are expected to join the platform, and approval from the National Bank is expected soon.
Through its existing partnership with Dashen Bank and Commercial Bank of Ethiopia, telebirr has enabled over 3.6 million customers to get loan. However, the telecom operator has never publicly shared its default rate. Many have also pointed out its high interest rates, which have increased since their first debut.
On the other hand, the Digital securities trading platform aims to empower authorized business institutions to digitize their share buying and selling processes in a cost-effective manner and make their shares accessible to a wider society.
This move comes after the National Bank of Ethiopia (NBE) revised its Payment Instrument Issuer Directive in October 2023, paving the way for mobile money platforms to offer diverse use cases in Ethiopia’s upcoming secondary market.
According to the new directive, mobile money platforms, with written approval from the National Bank and agreements with licensed financial market participants, can facilitate their users’ investment in government and private securities electronically.
These platforms are also authorized to handle payments of principal, interest (coupon), dividends, or any other returns arising from the users’ investment activities.
Ethiopia is on track to launch its stock market in 2024/25.