Issue 37: Local Fintechs On Edge

Issue 37: Fintechs in Ethiopia are On Edge!

June 13, 2022

Hello, Welcome to this week's edition of Shega Weekly Newsletter ( Issue # 37). Fintechs in Ethiopia are worried about the liberalization of the sector while Ethio Telecom is on a roll and enrolling in many merchants, some even exclusive.  Here are the major stories from Ethiopia's innovative ecosystem recapped for you. If you are here because someone forwarded you this email, you can subscribe here to get future newsletters. 

Ethiopia's Fintech’s on Edge Ahead of Sector Opening

Last week, Quartz, the global publication focusing on business and technology, reported that while the liberalization of Ethiopia's telecom sector was mostly welcomed and lauded as the right move, the opening up of the fintech sector for global superpowers has some concerns. 

The country’s financial regulator is amending a decade-old Payment System law, allowing foreign investors, for the first time, to set up business in Ethiopia as digital financial services providers.

Local fintechs say this is too soon and argue they haven’t been given enough time to test and scale products. They also raise their concerns arguing the liberalization process should be delayed by at least three years.

Fuel Subsidy to be Implemented Through only Telebirr

Public transport service providers can only benefit from the upcoming fuel subsidy programs if they use telebirr to pay for the fuel.

The gas station in addition to having merchant accounts will also serve as agents so that they can assist the vehicle owners in converting cash into their telebirr accounts to create convenience for the drivers.

The partnership is the latest in a string of deals the telecom operator has signed in recent weeks.

Court Rejects Claim That the Word “Ride” can be TrademarkedA judge at the Federal High Court has ruled that the word “Ride” can’t be trademarked as it’s a generic term that is commonly used, rejecting the multimillion birr claim Hybrid Designs Plc had brought against ZayTech IT solutions Plc.Two of the pioneers of ride-hailing service in Ethiopia have been at it in court for the past two years after Hybrid Designs sued ZayTech for infringement of its trademark.The development, which is one of the multiple legal suits instigated by Hybrid Designs against other ride-hailing platforms over the use of the word Ride, has been a serious issue in the emerging sector. In addition to ZayRide, Hybrid Designs has also sued Beza Ride, Seregela Ride, Fetan Ride, and Habesha RideThe presiding judge, who referred to the dictionary definition of the term ride, stated that the word is a common English word used related to travel, and in Ethiopia, the word was popularized with the coming of meter taxis. Read More

Ethio Telecom Inks Immigration Services DealThe state-owned Ethio telecom and the Immigration & Citizenship Service have signed an agreement to facilitate service payments through the Telebirr mobile money platform. Applicants can now pay fees for a new passport, renewal services, and other charges via Telebirr. The Service processes paperwork for up to 2,000 people a day.The mobile money platform has garnered over 19 million subscribers and facilitated transactions valued at around 10 billion Br since it was launched last May. 

Cryptocurrencies under Spotlight in Ethiopia Following Central Bank AnnouncementLast week was a roller coaster for cryptocurrency enthusiasts in Ethiopia following the national bank's announcement on Monday. Ethiopia's crypto community which was once confined to small circles has found itself in the spotlight.The regulator, the National Bank of Ethiopia, argues that the use of cryptocurrencies in Ethiopia intersects with matters whose proper way of practice has been determined by the law.For NBE, the most apparent violation comes from it recognizing birr as the only legal tender in the country, prohibiting all monetary transactions in other currencies.On the other hand, those who state that cryptocurrency is out of the reach of NBE cite another law. Read more at Shega about how the week unfolded in Ethiopia’s crypto space as well as the legal arguments surrounding the issue. 

Ministry Revises Tech PolicyThe Ethiopian Ministry of Innovation and Technology said it has begun implementing the revised Science, Technology, and Innovation Policy. The policy which was revised with the main goals of homegrown economic reform, creation of job opportunities, foreign exchange earnings, and increasing national productivity got approval from the Council of Ministers this year.The Minister of Innovation and Technology Bekele Molla (Ph.D.) stated in a press conference that the revised policy was designed to create a skilled and competent workforce and build an economy that is supported by technology.

Here is what we've been reading:

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