Issue 34: FSD Ethiopia Launch & Telebirr's Digital Micro Loans

Hello, Welcome to this week's edition of Shega Weekly Newsletter ( Issue # 34). From the launch of FSD Ethiopia to Ethio Telecom closing in giving out microloans, it was a busy and exciting week for Ethiopia's innovative ecosystem. Here at Shega, we have collected the major stories that have happened in the week so that you can catch up with what you might have missed. If this email was forwarded to you, subscribe here so that you don't miss anything. 

Ethiopia’s financial sector set for transformation with the launch of FSD Ethiopia The newly established development agency Financial Sector Deepening Ethiopia (FSD Ethiopia) was officially launched at the Hyatt Regency Hotel, Addis Ababa, Ethiopia. With funding from UKAid and the Bill & Melinda Gates Foundation, FSD Ethiopia will build on FSD Africa’s initial efforts to strengthen the country’s financial sector. About 120 guests attended the launch of FSD Ethiopia, including representatives from the Bill & Melinda Gates Foundation, the UK government’s Foreign, Commonwealth & Development Office (FCDO), Ethiopian Investment Holdings (EIH), the National Bank of Ethiopia (NBE), financial service providers, development agencies and other partners. Read More. 

Addis gets its latest co-working space

Located in the heart of Addis Ababa on Bole Road, CoSpace, a new co-working space on a mission to provide a workspace that boosts the productivity and well-being of professionals, has opened its doors.

CoSpace provides a fully-furnished facility to its members with access to Wi-Fi and essential office equipment such as a photocopier, scanner, and a printer, together with complimentary tea, coffee, and snacks.

Situated on the third floor of Bahar Building, across from Getu Commercial Building, CoSpace covers an area of 1000sqm.

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Bill that opens the financial sector in the Making 

As part of its legal framework amendment to allow foreign banks to operate in Ethiopia, the National Bank of Ethiopia (NBE) is revising the Banking Business Proclamation, wrote The Reporter. 

The revision includes setting a minimum capital for foreign banks to enter Ethiopia on a joint venture basis first. The Reporter added a team of experts from foreign consultants and development partners is currently working on the revision upon the request of the Office of the Prime Minister.

According to a consultant, the Reporter talked to the working on the revisions, the opening up of the sector will be gradual.

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Telebirr nears giving out micro loans

According to The Reporter, the National Bank of Ethiopia (NBE) is set to give the green light to Ethio Telecoms to start offering digital micro-credit and saving services via its mobile money platform, telebirr.After the company applied for a license, the bank decided to give the go-ahead to the company as the telecom operator's ambition is in line with the bank's plan of bringing digital finance transparency to fruition."With over 60 million people owning mobile phones, they can now use this service for a micro-credit digitally," The Reporter quoted Central Bank Governor Yinager Dessie (Ph.D.).Ethio telecom CEO Firehiwot Tamiru also confirmed to the newspaper that her office has not applied for the license and is hashing some details," Firehiwot told The Reporter.So far, transactions worth about 13 billion birr had been made by 18 million Telebirr subscribers. Read More 

Mastercard, OPay partner to grow cashless ecosystemMastercard and Nigerian fintech giant OPay announced a strategic partnership opening digital commerce to millions of people across the Middle East and Africa.The collaboration, which marks a significant boost for broader financial inclusion and economic prosperity, enables OPay consumers and merchants in the region – including Ethiopia, Algeria, Morocco, Egypt, Nigeria, Kenya, Pakistan, South Africa, and the UAE – to engage with brands and businesses anywhere across the globe, through a Mastercard virtual payment solution linked to the OPay eWallet.The service is available whether or not the customer has a bank account; the service is available. It also enables small business owners to buy from suppliers in other countries and pay with the secure virtual payment solution.In addition to digital commerce enablement, the two parties will jointly develop solutions to position OPay at the leading edge of financial services within the markets they operate in. Read More. 

NBE Passes new Law for the Implementation of Technology in Core Banking OperationsRENEW, an investment advisory firm, in its Legal Corner for May 2022, wrote The National Bank of Ethiopia (NBE) had introduced a Directive that obligates commercial banks to automate their system, at least their core business processes. As per this law, commercial banks must automate their customer due diligence, loan processing, loan portfolio management, and interest banking services, among others.NBE has set a time frame for banks to modernize their banking processes within the next two years, starting from the Directive's effective date. Not complying with the Directive within the set time framework will result in an ETB 10,000 fine each month. If a bank fails to automate its core banking business within additional two years, it will face partial or full suspension of related core business in due consideration of the nature of the function. Read More.

Yohannes Ejigu, one of Ethiopia's early mobile app developers, passesYohannes Ejigu, a self-thought developer, entrepreneur, and father who was one of the early mobile app developers in Ethiopia, has passed away. Yohannes, who is behind one of the first tech enablers of Amharic mobile keyword fynGeez, and several apps, was a Mandela Washington Fellow.He is remembered by his colleague as passionate, giving, and focused on sharing his passion with young people.Some of Yohannes's contributions were commemorated by his friend and colleague Muluadam Temesgen on LinkedIn. Read More.

Here is what we've been reading:

The scandal at Nigerian unicorn Flutterwave is the tip of a toxic icebergThe Current State of Ethiopia’s Angel Investing Landscape

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