EthSwitch announced that Somali Microfinance Institute(SMFI) has become the first microfinance institution to join EthSwitch as an Indirect Participant.
Founded in 2011, Somali MFI is the first Ethiopian MFI providing microfinance services that comply with the Sharia. It provides financial services to low-income households, entrepreneurs, and SMEs to help improve their economic situation.
After fulfilling all the requirements and bought the allocated 1035 shares, of which 60% is paid up Somali MFI signed an Indirect Participant agreement with EthSwitch in May 2021. This makes Somali MFI the first MFI to get approval from Ethswitch’s Board of Directors as an Indirect Participant.
What does this partnership mean for Somali MFI?
The participation enables Somali Microfinance to make its mobile wallet system ( Hello Cash ) interoperable with existing & upcoming payment systems. This will allow its customers to transfer funds to other financial institutions using their mobile wallets/accounts.
Somali MFI customers are now able to use payment accepting devices at banks and other payment system operators. Customers of the MFI will also be issued payment cards that can be used on all ATM & POS terminals.
Somali MFI CEO Mr. Khadar Ahmed said, “This is a significant step for us towards serving our customers with a variety of options in a much more integrated finance ecosystem. Through EthSwitch, we can provide our customers the ability to transfer funds and effect payments to and from their bank and other wallet accounts.” He also asserted that “This makes things a lot more convenient for our customers.”
EthSwitch, established in 2011, is a share company fully owned by all banks and several MFIs in Ethiopia. It is established to provide complete channel Interoperability, shared infrastructure/platforms, and institute a Domestic Card Scheme. The underlying mandate of Ethswitch is supporting the National Digital Payments and National Financial Inclusion strategies of the country.
EthSwitch CEO Mr. Yilebes Addis congratulated Somali MFI for this important milestone and appreciated the bold step taken by the management & technical team. He said, “Becoming a participant in the National Switch allows Somali MFI to benefit a great deal from the interoperable payment ecosystem and shared platforms that EthSwitch provides. In addition to offering its customers extended services, Joining EthSwitch helps Somali MFI to achieve this at a significantly low cost. The benefit of joining EthSwitch will be even more significant once EthSwitch launches its national & international Payment Gateway services shortly.
Other EthSwitch member MFIs are Aggar MFI, Peace MFI, Vision Fund MFI, One MFI, Buussaa Gonofaa MFI & DigafMFI.
It is remembered Somali MFI was one of the partners that joined hands with BelCash to launch HelloCash in 2015.