[Ethiopia] DEG invests $5million in M-BIRR mobile money service
Around 100 million people live in Ethiopia. More than three quarters do not have any access to banking services. The cashless money transfer and payment service, M-BIRR, provides an alternative to a bank branch by enabling payment by mobile phone.
DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, is investing EUR 4m in the provider of the mobile money platform. By doing so, it is playing a part in improving access to banking services in Ethiopia on a wide scale.
Other investors include the European Investment Bank (EIB). The Finnish development finance company Finnfund has been a shareholder in M-BIRR since as early as 2012.
Inspired by the success story of the Kenyan provider M-PESA, which began in 2007, M-BIRR was established by Thierry Artaud and Jim Noctor in 2009. At year-end 2017, over one million customers were registered on the platform for mobile payments. Six financial institutions in Ethiopia currently partner with M-BIRR and deliver the M-BIRR service.
The new capital is earmarked for the business expansion and for increasing outreach in the country. This will create 60 new jobs at M-BIRR, with additional indirect employment of over 400 in the agents network.
"DEG is providing equity capital for an innovative private company in one of the least developed countries in the world. By investing in M-BIRR, we are helping to advance financial inclusion in Ethiopia and to provide even more people with access to payment transactions", said Andreas Zeisler, Head of DEG’s Financial Institutions Equity department.
For decades now, Africa has been a focal region for DEG, a subsidiary of the KfW Group. It is primarily involved in Sub-Saharan Africa. In addition to investments in agriculture and private infrastructure, finance arrangements in the financial sector play a key role.
In this respect, FinTechs such as M-BIRR are becoming increasingly important. This field brings together innovative technologies that are used in financial services.