1 week in Addis Ababa ⏰🕊️

It has been exactly 7 days since I arrived in Addis, and it already feels like a month.

The city has an energy that no European city has. Here are some random observations since my last stay in 2017:

• There are new buildings and constructions everywhere

• Traffic is really bad (in part because of the previous point).

• I see much more smartphones than in 2017.

• Due to political instability, there are far fewer tourists (Ferengi) than in 2017.

• Electric cars are arriving.

• Inflation is very high.

This first week was a mix of family time and meetings. Before coming here I contacted a few Ethiopian entrepreneurs in the fintech/insurtech space.

I started to share on LinkedIn about my arrival in Ethiopia and about the first meetings I had, and then the magic happened.

I got the support from tens of Ethiopian entrepreneurs/tech people and meeting recommendations.

This week alone I had the chance to meet:

•  Leoul, CEO at Hulugram, an Ethiopian superapp built on top of Telegram.

• Bernard Laurendeau, CEO at Arifpay, the leading POS payment company.

•  Habtamu, CEO at LakiPay(a mobile payment app) and Zayride (car sharing app).

• My Amharic professor in person.

• SantimPay board member (fast growing payment gateway startup)

• Vince Diop from Belcash, a leading payment platform in Ethiopia.

• Aklilu and Dani from Garri Logistics, a company that leverages tech to efficiently transport freight across Ethiopia.

While each meeting could be the subject of a newsletter episode, I’m going to try giving an overview of the payment ecosystem.

Cash is king🤴🏽…but for how long?

Digitalising payments is a huge benefit for a country. From lower transaction costs, reducing theft and fraud, allowing financial services like loans, to enabling e-commerce and innovation.

Ethiopia has more than 95% of it’s transactions made with cash. If it follows the trend of Nigeria or India, we could see a significant digitalization of the payment system in the coming years.

The banking business in Ethiopia has long remained a reserved/protected sector for domestic investors.

Until recently, the National Bank of Ethiopia (NBE) has been issuing a banking and micro-finance license to traditional banking and micro-finance institution that have proliferated over the years.

Let’s try to understand who are the protagonists of the Ethiopian Finance/Fintech space.

The Commercial Bank of Ethiopia and CBE birr

The CBE is a state-owned bank that was established in 1942. Besides traditional banking services, the CBE launched the first mobile banking service in Ethiopia called CBE Birr.

Here is how it works:

• User Registration: Users register for a CBE Birr account by visiting a CBE branch or an authorized agent with a valid ID.

• Mobile Number: The account is linked to the user’s mobile number, which serves as the primary identifier.

• Account Activation: Upon registration, the user receives a unique account number and a default PIN, which they can change for security.

• Money Transfers: Users can transfer money to other CBE Birr accounts or to accounts with other mobile money services.

• Bill Payments: Users can pay utility bills and other service charges directly from their CBE Birr account.

• Airtime Top-Up: Users can recharge their mobile phones with airtime using their CBE Birr balance.

• Cash-In and Cash-Out: Users can deposit or withdraw cash from their CBE Birr account at CBE branches, authorized agents, or ATMs.

While CBE Birr itself is a mobile money service, it is integrated with CBE’s core banking system and thus can be used for traditional banking operations.

Ethio Telecom and Telebirr

Telebirr is a mobile money service launched by Ethio Telecom, Ethiopia's state-owned telecommunications provider.

Launched in May 2021, Telebirr has rapidly become a significant player in the Ethiopian mobile financial services market, leveraging Ethio Telecom's extensive network to offer financial services to millions of Ethiopians.

In addition to those huge mobile money services, there are several startups working on payment gateways /aggregators, digital wallets or mobile money.

• ArifPay: Facilitates online and mobile payments for businesses and consumers.

• Chapa Financial Technologies: Provides online payment processing solutions for businesses.

• YenePay: Enables businesses to accept digital payments for e-commerce transactions.

• SentimPay: Offers digital payment solutions, including facilitating online and mobile transactions.

• Belcash: Enables businesses to accept digital payments for e-commerce transactions.

• HelloCash (Developed by BelCash Technology Solutions): Offers mobile money services including money transfers, bill payments, and microloans.

• M-Birr: Provides mobile money services such as money transfers, bill payments, and microloans.

I met or will meet with founders of each one of them. While they see each other as competitors, I believe they’ll all benefit from changes of habits among the Ethiopians.

Remember, 95%+ of transactions is still cash 🏃‍♂️