<h1 style="text-align:center;">A Stock Exchange in Ethiopia</h1>During our June Impact Angel Network Members’ Call, members of the IAN and RENEW explored what happens when a country decides to open up a stock exchange. While Ethiopia is among the five largest economies in Sub-Saharan Africa and is the second-largest by population, it does not have a stock market. As you may have seen in the <a href="https://www.bloomberg.com/news/articles/2020-06-30/ethiopia-to-set-up-regulator-for-first-stock-exchange-this-year">news</a> recently, this is about to change as the Ethiopian Ministry of Finance has plans to open a stock exchange within the next year, though it will likely take more time to fully implement.&nbsp;<a href="https://renewstrategies.formstack.com/forms/astockexchangeinethiopia">CLICK HERE TO LISTEN TO THE MEMBERS CALL RECORDING</a> Given this exciting development, in the recording linked above, RENEW and members of the IAN discussed what this means for investors and what we should be doing now to prepare. We hope to work with our partners, including Global Affairs Canada, to begin educating SMEs on how exchanges work, as well as the benefits and drawbacks of becoming a publicly listed and traded company. Make sure to watch out for more information and webinars on this topic from RENEW in the future.&nbsp;If you’d like to join our monthly Members’ Calls to be a part of these discussions, we invite you to apply to <a href="https://renewstrategies.formstack.com/forms/renew_investor_accreditation_form">join the Impact Angel Network</a>.<figure class="image"><img src="/uploads/stockechange1_0_3ec92755cc.png"></figure>Photo by Ian Christmann: <a href="http://ianchristmann.com/">www.ianchristmann.com</a>

A discussion on Ethiopia’s future stock exchange and what it means for investors

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A Stock Exchange in Ethiopia

<h1 style="margin-left:0px;">Press Release: ChipChip Makes Online Shopping Cheaper with Group Buying</h1>The platform connects consumers directly with suppliers to drive down costs.<a href="https://latest-api.renewcapital.com/uploads/24_10_8_FINAL_Chip_Chip_Press_Release_b816fb1c7a.pdf" target="_blank" rel="noopener noreferrer">Download full press release</a>Addis Ababa, Ethiopia,&nbsp;October 8, 2024 - ChipChip, an innovative e-commerce platform bringing consumers and suppliers together through group buying, has secured investment from Renew Capital as lead investor as well as other international co-investors. Since its launch, <a href="https://chipchip.social/" target="_blank" rel="noopener noreferrer">ChipChip</a> has been changing how consumers purchase fresh produce and fast-moving consumer goods (FMCG) by enabling them to unlock bulk prices through collective purchasing.&nbsp;<figure class="image"><img src="/uploads/Linkedin_Templates_16_1e3cf6fbe2.png" alt="A photo of the ChipChip team based in Addis Ababa, Ethiopia, who work on connecting consumers directly with suppliers through group buying to make online shopping more affordable."></figure>ChipChip allows users to form groups, pool orders and buy directly from farmers and suppliers. By eliminating intermediaries, ChipChip allows users to enjoy bulk savings while supporting local farmers and suppliers. This community-based approach makes it easier for consumers to access high-quality, locally sourced products at lower prices.“We believe that group buying can change e-commerce in Africa by making it more affordable and impactful,” said Amir Redwan, Co-CEO of ChipChip. “Our platform helps consumers save while supporting local suppliers. With this investment, we’re excited to expand our reach and continue delivering value to communities across Africa.”ChipChip also caters to businesses like restaurants and hotels, providing access to bulk purchases of essential goods. With a seamless shopping experience and exclusive deals, the platform ensures consumers and businesses alike benefit from trusted and affordable access to products.“ChipChip is tackling some of the biggest challenges in Africa’s e-commerce - affordability and access to high-quality products,” said Adam Abate, Principal, Investment Management at Renew Capital. “By giving consumers direct access to suppliers, they’re not only making everyday products more affordable but also building lasting relationships between local producers and buyers. This model is transforming the way communities engage with commerce. We are proud to support Amir and his team as they lead this shift.”ChipChip employs 40 full-time staff and 50 sourcing agents, with 33 women and 57 men. By the end of the year, the company plans to grow to 400 employees, with a strong focus on promoting women, while also prioritizing the recruitment of top-quality talent with the support of Renew Capital.Renew Capital remains committed to supporting growth-oriented entrepreneurs who drive innovation and deliver scalable solutions to Africa’s most pressing needs.Support to Renew Capital portfolio companies is provided in partnership with Global Affairs Canada.

ChipChip, an Ethiopian e-commerce platform, secures investment from Renew Capital to expand its group buying model.

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Press Release: ChipChip Makes Online Shopping Cheaper with Group Buying

<h1>Ethiopian Birr Stabilizes, Business Owners Eye Risks</h1>Ethiopian business owners are adapting to rapidly shifting dynamics following the July 29, 2024 float of the Ethiopian Birr (ETB) by the National Bank of Ethiopia (NBE). Dropping a crawling peg (an exchange rate system where a country's currency is adjusted periodically in small amounts at a fixed, pre-announced rate) with rigid capital restrictions, which caused chronic forex shortages, was one of the conditions put forth during&nbsp;<a href="https://www.imf.org/en/News/Articles/2024/07/29/pr24291-ethiopia-imf-exec-board-approves-4yr-us3b-ecf-arr">negotiations with the International Monetary Fund</a> for a&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/ethiopia-imf-program-unlocks-16-6-billion-world-bank-package">$3.4B</a> debt deal, to support Ethiopia’s Homegrown Economic Reform (HGER) Agenda aiming to address macroeconomic imbalances, restore external debt sustainability and foster private sector-led growth. This arrangement is also expected to catalyze additional external financing and credit. Additionally, the World Bank pledged up to&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/ethiopia-imf-program-unlocks-16-6-billion-world-bank-package">$16.6B</a> over three years in support of Ethiopia’s aspiration to become a middle-income country.Renew Capital brought together members of the Isua Network, the Ethiopian women-in-business network, in Addis Ababa on August 22, 2024 to learn about how they are adapting to the change and to provide a legal overview of the impact of the float.&nbsp;<figure class="image"><img src="/uploads/Isua_Event_b68c906e84.png" alt="Members of the Isua Network, Ethiopian women-in-business, gathered in Addis Ababa on August 22, 2024, for an event arranged by Renew Capital to discuss adapting to changes following the Ethiopian birr float and receive legal insights."></figure>Major changes cascading from the NBE&nbsp;<a href="https://nbe.gov.et/wp-content/uploads/2024/07/FXD012024-FOREIGN-EXCHANGE-PR-English.pdf">foreign exchange directive</a> include:&nbsp;<ul><li>Banks can now buy and sell foreign currencies at freely negotiated rates. They are no longer required to surrender foreign currency to the NBE and may allow residents to hold foreign currency accounts inside Ethiopia.</li><li>Import restrictions on&nbsp;<a href="https://latest-api.renewcapital.com/uploads/Tariff_Items_Removed_in_2024_6434acb6fb.pdf">38 product categories</a> have been lifted and the forex market for imports has been broadly liberalized.</li><li>Interest rate ceilings on borrowing from foreign countries have been removed for private sector companies and banks.</li><li>Ethiopia’s securities market is now open to foreign investors.</li><li>Special Economic Zones companies may retain 100% of their foreign earnings in a foreign currency.</li></ul>In the medium and long term, this is a landmark move for Ethiopia’s economy. The previous system led to significant shortages of foreign currency, distorted import and export markets and difficulty attracting foreign capital into the economy. The changes enacted are expected to breathe life into the economy, especially in the form of foreign investment and credit, free up reserves previously used for maintaining the currency peg and enable market forces to attain equilibrium without government intervention.In the short term, business owners and consumers are concerned that Ethiopia’s trajectory will echo that of recent currency liberalizations, including&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/why-nigeria-s-naira-currency-ngn-usd-slumped-and-why-it-matters">Nigeria in 2023</a> and&nbsp;<a href="https://www.al-monitor.com/originals/2024/07/imf-greenlights-release-820m-egypt-cites-economic-improvement">Egypt in 2024</a>, which respectively resulted in 70% and 60% devaluations of the local currencies against the U.S. dollar. This rapid devaluation affected the already high inflation rates and in Nigeria, triggered a cost of living crisis. Indeed, the ETB has fallen 47% against the dollar in the four weeks since the float. This brings the official ETB-USD exchange rate to within 5-10% of the parallel market rate. Previously, dollars sold on the parallel market fetched a premium as high as double the official bank rate.<figure class="image"><img src="/uploads/image_3_ca6b9e5ac4.png" alt="A graph illustrating the exchange rate of 100 Ethiopian birr to USD from May 2024 to August 2024, showcasing the impact of the currency float on Ethiopia's economy."></figure><h2>Uncertainty for Businesses</h2>While most Ethiopians share concerns about inflation and cost of living, business owners are navigating an even more challenging landscape. The uncertainty of how markets and the government will react is top of mind for many. As is often the case in these situations, float-related fears led some businesses to&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-31/-etb-usd-dollars-vanish-from-ethiopia-s-streets-as-residents-hoard-forex">hoard dollars</a> and shops to raise prices immediately on essential goods, such as cooking oil, by as much as<a href="https://www.reuters.com/markets/currencies/ethiopian-local-authorities-crack-down-price-hikes-after-currency-float-2024-08-01/"> 25%</a>. Authorities&nbsp;<a href="https://allafrica.com/stories/202408090072.html">shuttered dozens of shops</a> accused of price gouging and confiscated inventory, adding fuel to the fears of business owners.Exporters, whose access to foreign currency makes them a target of regulation, are seeing incremental changes. Prior to 2023, exporters were allowed to retain only&nbsp;<a href="https://www.renewcapital.com/newsroom/ethiopia-doubles-foreign-currency-retention-limit-for-exporters">20% of the foreign currency they earned</a> through exports, the remaining 80% was surrendered to the National Bank of Ethiopia for forced exchange into ETB. In 2023, the allowed retention&nbsp;<a href="https://ethiopianlawgroup.com/wp-content/uploads/2023/08/NBE-monetary-policy-2023-en.pdf">increased to 40%</a>. The 2024 directive nudged it to 50%. While these changes provide some relief for exporters, there remains uncertainty, as the government can still adjust the regulations at any time.<figure class="image"><img src="/uploads/Money_c483e8ec7a.png" alt="A photo of the Ethiopian birr displayed alongside other currency notes, including the US dollar and various international currencies, highlighting Ethiopia's changing economic landscape."></figure><h2>Navigating Contracts</h2>One area where business owners may consider taking action is around contracts. Whether a contract is denominated in a foreign currency or in ETB, the value of existing contracts has changed overnight. Recognizing this challenge, Renew Capital invited Tsegamlak Solomon, Founder and Principal of the Addis Ababa-based law firm Tsegamlak Solomon &amp; Associates, to address this topic at the latest Isua Network event.The key takeaway for business owners was that the time to renegotiate contracts is now. Everyone doing business in Ethiopia is navigating this change together and there may be more opportunity and willingness to renegotiate within the first few months of this shift than later on.Mr. Solomon, who also has&nbsp;<a href="https://tsegasolomon.com/insights/f/how-will-ethiopia%E2%80%99s-currency-float-affect-your-business-contracts">written advice on the topic</a>, advised Isua members to:<ul><li>Review all contracts.&nbsp;Do any contracts contain a&nbsp;force majeure clause that includes unforeseen government changes? If yes, business owners should be prepared to renegotiate any such contract.</li><li>Evaluate&nbsp;the&nbsp;impact of the contract currency. Regardless of whether payment terms are delineated in ETB or a foreign currency, the reality on the ground has changed. Business owners should consider their own position and the counterparty’s to identify a solution that may suit both.</li><li>If negotiation is not possible, consider arbitration. Ethiopia’s Civil Code does not support court intervention in contracts, so strictly legal options are limited. However, the law does encourage parties to go through arbitration to determine a fair price that benefits both parties. Cases of onerous contracts – where one party is burdened with more costs than the other – are the most likely to be successful in this arena.</li></ul>One question raised by Isua members included whether there were any limitations to contracts being denominated in a foreign currency or a combination of ETB and a foreign currency. Mr. Solomon indicated that the chief constraint is that some contracts, such as employee contracts, may be set in a foreign currency, but must be paid out in ETB. Otherwise, business owners are free to use a variety of mechanisms. These include setting forex thresholds whereby pricing is reviewed once thresholds are reached or indexing different parts of the agreement to different currencies as desired.&nbsp;However the contract is designed, the most important point is to ensure that all contract elements, especially those related to forex, are crystal clear. This includes whether the contract follows the exchange rate on the date of signing or the prevailing rate of the NBE at the moment of payment.It is still early days and much remains in flux as the markets adjust. Isua business owners expressed both concern and optimism over the reforms. The question which remains is whether and how much this first critical step is followed by true market liberalizations in the coming months and years.

Ethiopian business owners are adapting to rapidly shifting dynamics following the July 29, 2024 float of the Ethiopian Birr (ETB).

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Ethiopian Birr Stabilizes, Business Owners Eye Risks

<h1>Secrets of Ethiopia’s Momentum</h1>Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now, and in that time much has changed. With a population of 126.5 million according to the World Bank and year-on-year economic growth despite various market-disrupting factors, Ethiopia cannot be ignored. Though the startup scene is slowly gaining momentum, we are patiently waiting and willing to share our thoughts with those interested in taking a look. Stop by the Renew Capital office above Galani Cafe in Jacros to meet with the team. If you are an entrepreneur looking for financing for your asset-light, tech-enabled business check out the&nbsp;<a href="https://venturelab.renewcapital.com/">Renew Venture Lab and apply</a>.&nbsp;<figure class="image"><img src="/uploads/Photo_0_29119a7e5a.jpeg" alt="Beautiful Addis Ababa skyscraper in Ethiopia's bustling cityscape, showcasing urban growth and development."></figure><h2>Key Developments in Ethiopia's Market Liberalization</h2>The two most impactful changes to the startup ecosystem in Ethiopia in recent times are Safaricom's entry into the market and the government's decision in May to open the banking and retail sectors to foreign ownership. In the coming months, further liberalizations in Ethiopia’s capital markets are expected. Here are a few of the key factors investors should keep in mind about Ethiopia's startup ecosystem:Government Support and Reforms:&nbsp;Ethiopia has been making significant strides in creating a supportive environment for startups. The government has introduced various policies and reforms, such as the Digital Ethiopia 2025 strategy, the Science Technology, and Innovation (STI) policy, and the draft Ethiopia Startup Act. The proposed Ethiopian Startup Act aims to support startups by establishing a National Startup Council and an Innovation Fund, overseen by the Ministry of Innovation and Technology. The Act seeks to foster innovation, remove barriers to entrepreneurship, and enhance access to foreign investment. The Innovation Fund will offer startup scholarships, cover intellectual property fees, and incentivize incubators and accelerators. Startups will also benefit from tax exemptions and simplified trade license processes, reducing operational costs and barriers​ (<a href="https://innobiz-k.et/ethiopias-startup-act/">innobiz-K</a>,&nbsp;<a href="https://www.spotlightethio.com/post/what-ethiopia-s-startup-act-means-for-entrepreneurs">Spotlight Ethio</a>,&nbsp;<a href="https://business.linkupaddis.com/ethiopias-startup-act/">LinkUp Business</a>, <a href="https://afrikanheroes.com/2021/11/22/proposed-startup-act-nears-completion-in-ethiopia/">Afrikan Heroes</a>).Focus on Digitalization: The Ethiopian government is heavily invested in digital transformation initiatives. The Digital Ethiopia 2025 strategy aims to leverage technology for economic growth. Additionally, initiatives like the Addis Ababa City Administration's Innovation and Technology Development Bureau and events like the Digital Startup Marketplace showcase Ethiopia's commitment to fostering a digital economy​ (<a href="https://startupgenome.com/ecosystems/addis-ababa">Startup Genome</a>,&nbsp;<a href="https://ethiopianbusinessreview.net/ethiopian-startup-ecosystem-transformed-by-groundbreaking-legal-reforms/">Ethiopian Business Review</a>).Labor and Energy:&nbsp;Ethiopia is positioning itself as an attractive destination for data centers and business process outsourcing (BPO) services, leveraging its abundant and cost-effective electricity and large labor force. The country has made significant investments in its energy infrastructure, primarily focusing on renewable sources such as hydroelectric power, which currently constitutes the majority of its energy production. This abundant and inexpensive energy supply is a critical factor for industries like data centers that require reliable and cost-efficient electricity​ (<a href="https://www.worldbank.org/en/news/press-release/2024/04/03/energizing-afe-ethiopia-new-world-bank-program-expands-access-to-electricity">World Bank</a>,&nbsp;<a href="https://www.iea.org/articles/ethiopia-energy-outlook">IEA</a>). Additionally, Ethiopia boasts a large and youthful labor force, with more than 61 million people as of 2023. This workforce is increasingly becoming skilled and educated, thanks to investments in education and vocational training programs​ (<a href="https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=ET">World Bank Data</a>,&nbsp;<a href="https://ycharts.com/indicators/ethiopia_labor_force">YCharts</a>). The combination of affordable electricity and a sizable, educated labor force creates a conducive environment for data centers and BPO services, which can benefit from lower operational costs and a pool of available talent.<h3>Challenges:&nbsp;Despite these positive developments, challenges remain</h3><div class="raw-html-embed"><style>
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</div><ul><li>Stability: Investors often question the country’s stability and macroeconomic conditions, asking, "Are my assets safe?"</li><li>Limited Funding: Local investors are scarce, and foreign investors are cautious due to the closed nature of the economy and elements of instability.</li><li>Regulatory and Bureaucratic Hurdles: Despite recent reforms, bureaucratic red tape still poses a challenge. The process of registering and incorporating a company, although simplified, can still be cumbersome, including complex tax laws and regulatory requirements that can deter potential entrepreneurs and investors​ (<a href="https://www.benjamindada.com/reforms-give-ethiopias-startup-ecosystem-a-fighting-chance/">Benjamin Dada</a>,&nbsp;<a href="https://bti-project.org/en/reports/country-report/ETH">BTI 2024</a>).</li><li>Infrastructure and Connectivity Issues:&nbsp;The cost and reliability of internet access can create barriers for the smooth operation of tech startups. Additionally, other basic infrastructure needs like transportation and electricity can be inconsistent, impacting business operations​ (<a href="https://www.capitalethiopia.com/2021/06/28/ethiopias-startup-ecosystem-ranks-top-100/">Capital Newspaper</a>).</li></ul>Ethiopia's startup ecosystem is slowly and steadily evolving, with substantial government backing and a growing focus on digital innovation. The potential for growth is immense, given the young and tech-savvy population, government support, affordable energy and labor, and the ongoing digital transformation efforts. Having called Ethiopia home for more than 12 years, I am hopeful the country will continue to overcome its challenges and become a strong force among Africa’s startup ecosystems.Go Deeper on Ethiopia<ul><li><a href="https://www.linkedin.com/feed/update/urn:li:ugcPost:7218873899587911680/" target="_blank" rel="noopener noreferrer">Addis Ababa in 12 Photos</a></li><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Ethiopia_Startup_Ecosystem_Factsheet_bbd213f998.pdf" target="_blank" rel="noopener noreferrer">Ethiopia’s Startup Ecosystem Factsheet</a></li><li><a href="https://www.google.com/maps/placelists/list/YI7_3BViBuFS28_hOMRGaSTsoB0yqA">Addis Startup Ecosystem Google Map</a></li></ul> Interested in other African Startup Ecosystems?&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">Download Renew Capital’s Ecosystem Factsheets on other Ecosystems</a>. We’ll be adding new ones every few weeks!&nbsp;

Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now and in that time much has changed. Learn about Safaricom's entry, labor force potential, energy investments and challenges facing entrepreneurs in this evolving ecosystem.

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Secrets of Ethiopia’s Momentum

<h1>Ethiopian Bank Trials Revenue-Based Financing&nbsp;</h1>Cooperative Bank of Oromia has made 18 collateral-free loans for female and male entrepreneurs as part of a first-of-its-kind pilot in the country<ul><li>Innovative Lending -&nbsp; The Cooperative Bank of Oromia introduces revenue-based financing to support entrepreneurs in Ethiopia, with a focus on women.</li><li>Collateral-Free Loans -&nbsp; Revenue-based financing allows loan approval based on evidence of income rather than collateral.&nbsp;</li><li>Supporting Women - A significant portion of the loans disbursed under this pilot program have gone to women.</li></ul><figure class="image"><img src="/uploads/WB_cb4210cc00.png" alt="Image of entrepreneur showcasing her garments in the bustling streets of Addis Ababa, highlighting resilience and innovation in Ethiopia's SME sector,"></figure>In the bustling streets of Addis Ababa, Betelhem Tamene, the dynamic entrepreneur behind a small-scale garment production company, embodies the resilience and ingenuity of Ethiopia's burgeoning small and medium sized enterprise (SME) scene.&nbsp;&nbsp;Tamene's journey epitomizes the challenges faced by women-owned businesses in accessing traditional financing. Armed with determination and a 100,000 ETB ($1,700) revenue-based loan from the Cooperative Bank of Oromia (CBO), she recently embarked on a mission to procure inputs for her diverse product line, ranging from trendy t-shirts to essential student uniforms.&nbsp;Unlike conventional loans with rigid repayment structures and high thresholds for credit history and collateral, Tamene gravitated toward the flexibility of the revenue-based financing (RBF) model. The new lending product is spearheaded by CBO in collaboration with the World Bank's Africa Gender Innovation Lab, Renew Capital and Rise Addis Advisory.Tamene is excited about the new loan product: “This loan offers a great deal of flexibility as repayment is tied to revenue, which is especially beneficial for businesses like mine that experience seasonal fluctuations [and] often struggle to meet the collateral requirements of traditional bank loans.”With the aid of “Souqpass,” CBO's newly launched digital platform, Tamene digitized her financial management. This platform provides a transparent and efficient system that aligns loan eligibility with actual business performance, providing an alternative to collateral-based financing for entrepreneurs like Tamene.&nbsp;On the other side of Addis, Emebet Abit owns a children’s boutique and school accessory shop and noted that she feels she now has an edge over her competition. She also received a collateral-free loan for 100,000 ETB ($1,700) loan and used Souqpass as part of the process. Since using the platform to track her expenses, revenue and inventory, she has consolidated insights about her business through the user-friendly summary dashboards.&nbsp;<figure class="image"><img src="/uploads/IMG_2199_3b78d4caea.jpeg" alt="Image of an entrepreneur using the Souqpass platform to access a loan application portal, illustrating how visibility into business performance helps reduce reliance on collateral for financing."></figure>Using the Souqpass platform unlocks access to a loan application portal where entrepreneurs can qualify for loans based on the actual performance of their business. The increased visibility into operations reduces the need for the bank to rely on collateral as a risk mitigation measure.Bridging Capital With InnovationBank financing has long been a roadblock for many entrepreneurs, especially women entrepreneurs who often do not have the collateral that banks need to access financing. In addition, a fixed loan repayment schedule is unresponsive to fluctuating macroeconomic realities and the natural seasonality that some industries experience.&nbsp;In basic terms, RBF means that entrepreneurs can pay as they earn. In its simplest form, there are no fixed payments. Their revenue dictates the amount they pay. If a business has a rough month when they do not generate revenue then they do not have to pay.This type of financing is common in the world of venture capital and fintech providers but CBO has pioneered the approach in Ethiopia with support from World Bank's Africa Gender Innovation Lab, Renew Capital and RiseAddis Advisory. To the delivery team’s knowledge, CBO is the first traditional bank to deploy the model.&nbsp;A Step Towards Inclusive FinanceSo far, loans have been disbursed to 20 entrepreneurs, with a majority of them being women. There are two repayment options available:<ul><li>The pure RBF model where companies repay 20% of their revenue each month (no payment if they have no revenue).</li><li>A hybrid model&nbsp;where companies repay 20% of their revenue each month along with a small fixed payment (3% of revenue projections at the time of loan approval).&nbsp;</li></ul>The project team is monitoring loan performance and plans to refine repayment structures and risk management approaches as the pilot progresses.&nbsp;CBO’s revenue-based financing pilot program is still in its early stages, but this could very well become a key innovative strategy for banks to close the financing gap for entrepreneurs across the continent.&nbsp;

Cooperative Bank of Oromia has made 18 collateral-free loans for female and male entrepreneurs as part of a first-of-its-kind pilot in the country

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Ethiopian Bank Trials Revenue-Based Financing 

Renew Capital's presence has expanded to 14 African countries. We aim to provide insight into Africa's startup scene, along with the opportunities and challenges it presents through a series of blogs from our in-country teams. If you share our passion for developing entrepreneurship in Africa, we invite you to check out our open&nbsp;<a href="https://www.renewcapital.com/careers">roles</a>.&nbsp;<h1> My Journey to Renew Capital: Get to Know Samrawit Geremew</h1>From travel and tourism to nurturing Ethiopia's entrepreneurial ecosystemWelcome to the latest feature in our 'Journey to Renew Capital' blog series. In this interview, we get to know Samrawit Geremew, a Senior Project Manager based in Ethiopia, and learn about her journey to Renew Capital. Samrawit was born and raised in Ethiopia and now supports Renew Capital’s entrepreneurial-building projects in her home country. During the interview, we discuss Samrawit's transition from travel to project management and her passion for entrepreneurship development in Ethiopia. We also explore how she is helping to forge a new path for the country through her work.<figure class="image"><img src="/uploads/image_b686acca31.png" alt="Photo of a Senior Project Manager based in Ethiopia in her graduation gown, posing alongside Renew Capital employees, celebrating her academic achievement."></figure>Could you share with us a bit about your background and how you came to join Renew Capital?I hold a Master's degree in Marketing Management and a Bachelor’s degree in Business Administration and Information Systems. I started my career in travel and tourism, working with Ethiopian Airlines and BCD Travel Ethiopia. While I loved my work in travel and tourism, a persistent urge drove me to pursue a field where my efforts could directly impact my community. In October 2020, I made a deliberate shift to Renew Capital. The organization's vision deeply resonated with my personal goals, as it aims to shift the global perspective on Africa from one of giving to one of investing.Time indeed flies when you're making an impact! Could you share any standout moments or stories from your journey with Renew Capital so far?I've been part of the Renew Capital team for more than three years now. Reflecting on this period, one standout aspect of my journey has been leading and supporting capacity-building projects designed to empower women entrepreneurs and startup founders. These projects support Renew Capital's overarching mission to bolster the private sector and provide robust support for women in business.My fulfillment comes from the tangible outcomes of our efforts in directly impacting the community. Witnessing the growth and success stories of the participants we've supported has been a rewarding experience, reinforcing my belief in the transformative power of the work we do. It's these moments that make the journey at Renew Capital truly meaningful and inspiring.How do you manage the balance between consistency and innovation in your role as a senior project manager at Renew Capital? Can you share some insights into your approach?&nbsp;Navigating the delicate balance between consistency and innovation is indeed an art, especially in the dynamic market of Ethiopia. In my role as senior project manager, our projects require continuous evaluation and innovation. The landscape demands agility and adaptability to address the evolving needs of startup founders, women entrepreneurs, resource providers and interns.The key to our approach lies in tailoring training curricula, delivery methods and coaching sessions to suit these dynamic needs while upholding quality and operational efficiency. It's about staying attuned to the ever-changing environment and being responsive to the unique challenges and opportunities that arise. This flexibility ensures that we not only meet but exceed the expectations of our diverse stakeholders in this dynamic and vibrant ecosystem.How has growing up in Ethiopia shaped your perspective? What are your hopes for the future, especially the aspirations you have for the younger generation in Ethiopia?Growing up in Ethiopia— a country with ancient civilization, diverse cultures, rich history and beautiful landscapes—has played an immense role in shaping who I am today. At the same time, I encountered a unique set of challenges growing up here primarily limited opportunities and a lack of adequate mentorship. This made it difficult for me, and others like me across the country to navigate their paths effectively and reach their full potential. Entrepreneurship also faced societal skepticism, compounded by insufficient formal education, training and vital infrastructure to nurture budding entrepreneurs. Despite these hurdles, recent positive movements and collaborative efforts by public and private stakeholders have ignited hope for many.&nbsp;As someone deeply involved in Ethiopia’s entrepreneurial ecosystem today, my journey reflects not just personal growth but a collective effort to reshape mindsets and foster economic stability through innovative projects. The road ahead holds promise, driven by collaborative endeavors and a shared understanding of the transformative potential inherent in startups and SMEs. My hope is for a future where the entrepreneurial spirit thrives, creating a vibrant landscape for economic growth and prosperity in Ethiopia.&nbsp;

My fulfillment comes from the tangible outcomes of our efforts in directly impacting the community.

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Journey to Renew Capital: Get to Know Samrawit Geremew

<h1>Press Release: Renew Capital Angels Invest in Jamii.one, a Micro Insurance Platform</h1>Supporting solutions to expand financial inclusion across Ethiopia, Renew Capital partners with Jamii.one<a href="https://latest-api.renewcapital.com/uploads/FINAL_Jamii_One_Press_Release_e2a1650a7b.pdf" target="_blank" rel="noopener noreferrer">Download the Full Press Release</a>Ethiopia, September 28, 2023&nbsp;—&nbsp;Driving towards financial inclusion for communities across Ethiopia, Renew Capital Angels has partnered with Jamii.one, a trailblazer micro-insurance platform for the African landscape.The company has begun services in Ethiopia, where there are few insurance options for rural communities and only 42% of mobile phone owners own smartphones.<figure class="image"><img src="/uploads/unnamed_96ad0f588d.jpg" alt="A happy team photo of Jamii.one members posing together in Addis Ababa, Ethiopia, showcasing their commitment to enhancing financial inclusion through micro-insurance solutions."></figure>Jamii.one’s growth has come from self-organized Ethiopian community groups called "Iddirs" that bring on average around 50 people together making monthly contributions for informal cooperative-like insurance for funerals and other significant life events.&nbsp;More than 30% of Ethiopians participate in Iddir groups, which often face operational difficulties due to manual data tracking and management, preventing them from fully meeting their members' financial needs. Jamii.one provides an app-based data registration tool for Iddirs and connects them to affordable, reliable insurance options. “When we entered the market it didn't take us long to introduce the Iddir community to Jamii.one. After we tailored our product for Iddir and enabled access to affordable group micro life insurance it was amazing to see the power of technology with the power of community,” says <a href="https://www.linkedin.com/in/tigist-bezu-928519158" target="_blank" rel="noopener noreferrer">Tigist Bezu</a>, co-founder.&nbsp;Importantly, the app is designed to accommodate low literacy levels, offline functionality and limited smartphone usage, making it accessible to a wider segment of the population. This initiative aims to enhance financial inclusions across Ethiopia and beyond.

Renew Capital Angels invests in Jamii.one, a micro-insurance platform enhancing financial inclusion in Ethiopia. By leveraging community groups, Jamii.one offers affordable insurance solutions to rural populations, improving access to essential services.

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Press Release: Renew Capital Angels Invest in Jamii.one, a Micro Insurance Platform

In a significant move to support the growth of Ethiopian exports and reduce the inflation rate, the National Bank of Ethiopia (NBE) has taken a decisive step to amend the foreign currency retention limit.&nbsp;&nbsp;<h1>Ethiopia Doubles Foreign Currency Retention Limit for Exporters</h1>Tracing Policy Evolution and Economic Implications as the National Bank of Ethiopia Made Significant Changes<figure class="image"><img src="/uploads/unnamed_3f52256ebf.jpg" alt="Close-up of Ethiopian Birr banknotes showcasing design and features of Ethiopian currency."></figure>On August 11, 2023, the National Bank of Ethiopia (NBE) announced an amendment to&nbsp;<a href="https://nbe.gov.et/wp-content/uploads/2023/04/fxd-79-2022.pdf" target="_blank" rel="noopener noreferrer">Directive No. FXD/79/2022&nbsp;</a> governing the Retention and Utilization of Export Earnings and Inward Remittances (the “Amended Directive”). This amendment was effected via the Directive for Amendment of the Retention and Utilization of Export Earning and Inward Remittance&nbsp;<a href="https://nbe.gov.et/wp-content/uploads/2023/09/fxd-84-23.pdf" target="_blank" rel="noopener noreferrer">Directive No. FXD/84/2023</a> (the “New Directive”). The New Directive effectively doubles the percentage of foreign currency that exporters are permitted to retain from their forex earnings. In the official announcement, the Governor of the National Bank highlighted that this move is geared toward alleviating Ethiopia's inflation rate, which had surged past 30% during the previous two years, before registering a slight decline to&nbsp;<a href="https://tradingeconomics.com/ethiopia/inflation-cpi#:~:text=The%20annual%20inflation%20rate%20in%20Ethiopia%20eased%20for%20a%20third,slowed%20for%20almost%20all%20components.">28.8% in August 2023</a>.&nbsp;&nbsp;The announcement that came last month from the NBE permits exporters to retain 40% of their export proceeds in foreign currency, twice the amount allowed under the Amended Directive. However, the retention amount for inward remittances remains unchanged at 20%. The New Directive could encourage exports by introducing positive incentives.&nbsp;<h2 style="text-align:justify;">Tracing the Evolution</h2>The journey towards allowing exporters to retain their forex proceeds found its origins in August 1996, when NBE introduced Directive No. FXD/02/1996:Directive No. FXD/02/1996:<ul><li>Granted exporters the privilege of retaining a designated portion of their export proceeds in foreign currency.</li><li>First round of amendments in October 1996 focused on expanding the permissible amount of foreign currency (FCY) retention.</li></ul>Directive FXD/11/1998:<ul><li>Allowed exporters to retain 100% of their export earnings.</li><li>Distributed it between accounts A and B in a 10:90 ratio.</li><li>Account A: exporters were allowed to retain 10% of the FCY for an unlimited period of time.</li><li>Account B: exporters retained 90% of the FCY for 28 days, after which it would automatically convert to the local currency.</li></ul>Directive No. FXD/48/2017:<ul><li>Adjusted the FCY retention ratios to a 30:70 distribution across the two accounts.</li><li>Account A: exporters were allowed to retain 30% of the FCY for an unlimited period of time.</li><li>Account B: exporters retained 70% of the FCY for 28 days, after which it would automatically convert to the local currency.</li></ul>Policy adjustment in 2021:<ul><li>Retained FCY amount for exporters increased to 45%.</li><li>Retention accounts A and B were combined into one account with no imposed time frame for conversion.</li></ul>Directive No. FXD/79/2022:<ul><li>Implemented due to an urgent need for currency stability.</li><li>Required businesses to surrender 80% of their forex earnings.</li><li>The surrendered amount was automatically converted into Ethiopian Birr.</li><li>This marked a more stringent turn in the policy evolution.</li></ul><h2 style="text-align:justify;">Possible Economic Implications</h2>While assessing the impact of the most recent directive, it's essential to consider two potential outcomes. On the one hand, the directive introduces positive incentives to encourage exports. The Amended Directive, which required exporters from various industries, including meat processing, grain, coffee, sesame, and leather, to surrender up to 80% of their foreign currency earnings, has been a major concern. As a result, export earnings are on the decline, with&nbsp;<a href="https://www.thereporterethiopia.com/35709/">coffee exports</a>, for instance, dropping by nearly $80M USD since 2022. Furthermore, the&nbsp;<a href="https://www.thereporterethiopia.com/35235/">leather industry,</a> where the high cost of chemical inputs, driven by limited foreign currency access, has escalated production expenses, is also suffering. This has resulted in reduced production capacity, factory closures, and job losses, impacting not only individual producers but also the broader Ethiopian economy.On the other hand, another consequence of the new directive could involve concerns about a reduction in the government's concentration of FCY, which could be mitigated through strategic measures. For instance, ensuring that exporters actively participate in the FCY market by legally providing FCY to importers and businesses would alleviate the burden on the National Bank. Attracting increased Foreign Direct Investment (FDI) through a robust legal framework and favorable business conditions can also counter any potential decrease in the government's foreign currency holdings. Lastly, ensuring government-owned enterprises like Ethiopian Airlines can contribute more effectively to foreign exchange reserves could be another way to reduce the impact.&nbsp;

On August 11, 2023, the National Bank of Ethiopia (NBE) announced an amendment to Directive No. FXD/79/2022  governing the Retention and Utilization of Export Earnings and Inward Remittances (the “Amended Directive”).

Ethiopia Doubles Foreign Currency Retention Limit for Exporters

Join us on&nbsp;<a href="https://us02web.zoom.us/webinar/register/WN_AFBoc_tJSx6ed1tPklSOEQ">October 3, 2023,</a> from 9 AM (4 PM EAT) to 10 AM (5 PM EAT) for a learning webinar in which we will dive deeper into key lessons learned from both pilot projects and discuss what could be next for Ethiopia’s private sector and startup ecosystem.&nbsp;&nbsp;<h1>Strengthening Urban to Rural Linkages and the Trucking, Transportation and Logistics Sector in Ethiopia</h1><figure class="image"><img src="/uploads/Photo_Credit_Renew_Capital_1_e95d6264f9.png"></figure>From late 2020 through February 2021, USAID’s Bureau of Humanitarian Assistance (BHA) conducted a Private Sector Landscape Assessment (PSLA) for Ethiopia that identified and prioritized concrete opportunities to integrate high-impact private sector engagement (PSE) initiatives into USAID BHA’s emergency and non-emergency programming for Ethiopia. Ultimately, the PSLA recommended focusing on two thematic areas for new PSE opportunities:<ul><li>Expanding businesses to rural areas in support of the Mission’s Resilience Food Security Activities (RFSAs); and&nbsp;</li><li>Strengthening the trucking sector within Ethiopia through improving standardizations, planning requirements, utilization of new technologies and improving driver requirements to both improve the delivery and reduce the costs of providing food assistance.</li></ul>In support of these recommendations, USAID BHA launched the Strengthening Humanitarian Assistance and Resilience Private Sector Engagement in Ethiopia (SHARP-SEE) Project in partnership with Renew Capital in March 2022, during which the project team worked to strengthen urban-to-rural linkages and enhance the trucking, transportation and logistics sector in Ethiopia. This collaboration resulted in robust market and ecosystem research, pipeline formation, micro-testing of solutions, as well as the implementation of two pilot projects between February 2023 and July 15, 2023, in Ethiopia.THE LOGITECH INVESTMENT SPRINTThe first pilot project was a 12-week, intensive training program focused on 10 logistics and technology (or “LogiTech”) startups in Ethiopia. Key takeaways from the pilot project included:<ul><li>Renew Capital estimates that the Ethiopian economy needs nearly $1B in investment to overcome its funding gap in the trucking sector and be on par with Kenya’s fleet size per capita.</li><li>Trucking and transportation companies are not tech-enabled; most companies still operate with manual processes.</li><li>Tech-enabled startups have the potential to provide the much-needed innovation to optimize Ethiopia’s trucking and logistics sector.</li></ul>However, Ethiopia’s startup ecosystem remains nascent and un-activated:<ul><li>Ethiopian startups only attracted 0.07% of capital invested in logistics and transport startups in Africa from 2019 to January 2023.</li><li>The average deal size for Ethiopian logistics startups was $170K, significantly lower than other African countries from 2019 to January 2023.&nbsp;</li><li>Ethiopian startups only raised 5.82% of the total capital raised by startups in Africa from 2019 to January 2023.</li></ul>From the project team’s perspective, the lack of easily accessible startup and growth capital is not the problem in it of itself, but it is a symptom of a nascent startup ecosystem within Ethiopia. In general, startup founders need support to scale in key skill areas, including product development and customer engagement, operations (especially cash management), as well as pitching and investment readiness.The SHARP-SEE project team aimed to address these challenges through the key project activities addressed in the next section.<img><img src="/uploads/Photo_Credit_Renew_Capital_2_6098f5a73c.png">ACTIVITIES &amp; KEY OUTCOMES:The LogiTech Investment Sprint aimed to address persistent challenges in Ethiopia's logistics sector by training and coaching LogiTech startups over a 12-week program that covered essential business skills, such as strategic planning, organizational structure, financial management, product development, customer engagement and investment readiness.The program also assisted startups in refining their minimum viable products through customer interviews, setting growth targets and KPIs and continuous performance analysis. Participating startups focused on various areas within logistics, including intercity logistics, public transportation, last-mile delivery, B2B logistics and digital tools for truck operators involved in import and export.These innovations align with Ethiopia's modernizing digital economy, paving the way for a more tech-enabled logistics sector. Additionally, they have the potential to enhance humanitarian aid delivery by introducing digital solutions to a traditionally un-digitized sector. Furthermore, tech-enabled logistics services can strengthen urban-to-rural linkages, improve relationships between manufacturers, suppliers, and retailers, and enhance urban and intercity transportation and improve the efficiency of humanitarian aid deliveries over the long term as processes become optimized by technological processes. Overall, these initiatives aim to make logistics more efficient and contribute to the development of Ethiopia's digital economy.CHECK OUT THIS&nbsp;<a href="https://drive.google.com/file/d/1BuMIySXmVo8XEqNUs8YNWOvXzMkWXWD2/view?usp=drive_link">VIDEO</a>&nbsp;HIGHLIGHTING THE PROJECT’S FINAL PITCH EVENT.&nbsp;THE AGRICULTURAL INPUT SUPPLY CHAIN OPTIMIZATION (AGISCO)&nbsp;In terms of urban-to-rural linkages, the project team learned the following as part of Phase I and Phase II research:<ul><li>The agricultural input supply chain is broken throughout Ethiopia.&nbsp;</li><li>Smallholder farmers lack access to reliable and steady supplies of inputs.</li><li>Smallholder farmers and agrodealers alike lack access to capital, preventing them from scaling.</li><li>Agrodealers are unable to receive timely deliveries of high-quality inputs at a reasonable price.&nbsp;</li><li>Typically, agrodealers travel long distances to purchase inputs and arrange their own logistics, resulting in high costs.</li></ul>In light of these findings, the project team launched the Agricultural Input Supply Chain Optimization (AGISCO) project in partnership with a local Ethiopian agritech startup. This Ethiopian technology startup provides a digital marketplace for smallholder farmers to access inputs, mechanization services, climate advisory content and tailored credit products. AGISCO’s objective was to de-risk the expansion of this product into one of USAID BHA’s target resilience and food security (RFSA) project areas, specifically five woredas in Eastern Hararghe.&nbsp;&nbsp;The AGISCO project engaged a local Ethiopian agritech company to support its growth and sustainability in Eastern Hararghe through a KPI-focused approach. The project’s objectives included enhancing agricultural input distribution, increasing digital adoption, improving supply chain efficiency and expanding access to credit.The project was divided into three phases:<ul><li>Phase I: Landscape Mapping, Agent Training and Platform Optimization</li><li>Phase II: Recruiting and Training Additional Agents</li><li>Phase III: Deployment of Agents and Platform Services into Additional Woredas</li></ul>Top-line objectives of the pilot project included:<ul><li>Train 24 New Agents Onboarded</li><li>Onboard at least 12,000 new farmers onto the platform</li><li>Provide access to inputs, mechanization services, finance and climate advisory to onboarded farmers</li><li>Reduce costs of logistics incurred by smallholders</li></ul>As part of AGISCO, the project team also provided strategic advice and recommendations to the local agritech partner throughout the project during weekly check-in calls.TO DATE (SEPTEMBER 13, 2023), THE AGISCO PROJECT HAS ACHIEVED THE FOLLOWING KEY OUTCOMES:In achieving these project outcomes, the project team has learned the following key lessons and identified key opportunities:<figure class="image"><img src="/uploads/Screenshot_2023_09_13_at_5_28_40_PM_b37d48eb2c.png"></figure>Growth of Fintech Could Increase Access to Finance: The current situation in Ethiopia is a critical moment for the growth of access to finance and fintech services. The introduction of M-PESA and competition among local providers like Telebirr marks a significant change in the market dynamics. Fintech companies in Ethiopia are competing for market share and expanding their service offerings. This competitive environment could drive innovation and the development of tailored financial products to meet the needs of different customer segments, including smallholder farmers. However, the market is still largely not tech-enabled, creating challenges that may impede scaling on the ground in the near future.Coordination for Resource Optimization:Efficient coordination between orders and suppliers is crucial for maximizing the utilization of limited logistics and transportation resources. As observed in the pilot project, technology can play a pivotal role in enhancing the capacity utilization of existing transport resources.Technology as a Solution: Platform-driven technological approaches can facilitate the dissemination of multiple services, such as financial services, logistics provisions, input distribution, and educational and climate-related materials, through a single platform. The flexibility of these services, if done correctly, could dramatically expand the ability of smallholders to access crucial services, increasing incomes and overall food security in the long term.

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Strengthening Urban to Rural Linkages and the Trucking, Transportation and Logistics Sector in Ethiopia

Ethiopia’s fintech infrastructure is improving with the soft launch of Safaricom Ethiopia’s mobile financial service M-PESA, which boasts 51 million customers across Africa, in Addis Ababa, on August 16, 2023. The service expects to make a full national launch in September.<h1>M-PESA Launches in Ethiopia</h1><figure class="image"><img src="/uploads/Screenshot_2023_08_20_at_6_41_31_PM_3019bbc216.png" alt="A local M-PESA shop in Ethiopia, symbolizing the growth of fintech infrastructure in the region, as Safaricom Ethiopia's mobile financial services gain momentum"></figure>Photo courtesy of Andrew LarsenEthiopia’s fintech ecosystem has lagged behind its neighbors in recent years as a result of Investment Proclamation 1180’s ban on foreign investment in the sector among other factors. However, in May 2023, this prohibition was waived to allow M-PESA, a mobile money platform with 51 million customers and owned by Kenya’s Safaricom, to operate in Ethiopia for a licensing fee of $150M USD.&nbsp;For context, according to Africa: The Big Deal Database, while Kenyan fintech startups have raised $517.8M since 2019, Ethiopian fintech startups have only raised $17.6M. This disparity results in Kenya having raised 67.6x more capital for fintech on a per capita basis than the Ethiopian market, underscoring the disparity. <img src="/uploads/Screenshot_2023_09_06_at_11_43_27_AM_a01ec577a6.png" alt="A graphical representation of fintech investment trends in East Africa, showing a comparison of capital raised in millions of USD from January 1, 2029, to July 31, 2023, emphasizing the region’s dynamic financial evolution."> &nbsp;Kenyan fintech startups have attracted more than 67x more capital per capita than Ethiopia.Source:&nbsp;Renew Capital's analysis of publicly disclosed deals in startups since 2019 captured in “Africa: The Big Deal Database.”After a three-month pilot test, M-PESA has <a href="https://safaricom.et/index.php/news-insights/97-safaricom-ethiopia-goes-live-with-m-pesa" target="_blank" rel="noopener noreferrer">announced</a> it is launching and joining Ethiopia’s mobile money market as a competitor to the state-owned Ethio Telecom’s flagship financial mobile money service provider, Telebirr. M-PESA is now available for Safaricom Ethiopia’s 4M customers. For context, Safaricom Ethiopia has been expanding its network across 147 towns in Ethiopia over the past 10 months.However, customer acquisition will likely remain challenging for M-PESA. Telebirr, the Ethiopian government-owned mobile money service, had a two-year head start, launching initially in May 2021 and introducing a super-app version in March 2023, which provides users with access to a large assortment of services within the app's single interface. The app now provides eCommerce options, food delivery, entertainment, utility bill payment options and transportation payment options. The Telebirr App currently owns over 20 mini apps and is also providing benefits to the startup ecosystem by allowing local Ethiopian startups access to the app's user base of over 30 million users.&nbsp;Moreover, in April 2023, the Ethiopian government began requiring fuel payments to be completed using Ethiotelecom's Mobile Money app, Telebirr. This further entrenched Telebirr’s position as the market leader in mobile money in Ethiopia just one month before the Ethiopian government awarded M-PESA its license to operate.Similarly, in April 2023, Chapa, one of Ethiopia's leading online payment providers, announced that it would be teaming up with Telegram to enable merchants using Telegram to accept payments from their customers using a Chapa integration. Thousands of businesses throughout Ethiopia are already selling products through the messaging app; this partnership allows those merchants to accept payments from their customers using mobile money, bank transfers, or debit/credit cards without leaving the app.&nbsp;Importantly, as of August 15, 2023, Chapa partnered with&nbsp; COOP Bank to launch the Coop-Chapagram bot integration that operates within Telegram. The feature allows users to access numerous financial services through the Telegram application, according to COOP Bank.&nbsp;Safaricom’s presence in multiple African countries might be the competitive advantage M-PESA brings to the market that has been monopolized by the state-owned service provider, Telebirr. If commerce is facilitated between the countries in which M-PESA has a presence, it could also end up becoming an asset for the AfCFTA.In summary, the entry of M-PESA into Ethiopia is a crucial next step in increasing financial access and inclusion in Ethiopia, where approximately 78% of the population lives in rural areas.&nbsp;For example, according to the World Bank, only 35% of adults in Ethiopia have access to formal bank accounts. Comparatively, in Kenya, 82% of adults have an account, while in Rwanda, 50% of adults reported having a formal bank account. In sub-Saharan Africa overall, 43% of adults have an account.&nbsp;Increasing the number of mobile money payment services can help to increase access to finance for rural populations and others throughout Ethiopia. Finally, the market competition between M-PESA and Telebirr will help to increase the quality of service provision between the two companies as they compete for market share, a generally good free market outcome.

M-PESA is now available for Safaricom Ethiopia’s 4M customers. 