DEG, a subsidiary of KfW Group, Germany, announces equity capital of EUR 4 million into Ethiopian payment platform, M-BIRR.
M-BIRR, which says it is the first mobile money service provider in Ethiopia, is a cashless money transfer and payment service which provides an alternative to a bank branch by enabling payment by mobile phone (“mobile money”) and DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH), is investing €4 million in the provider of this mobile money platform and sees it as playing a part in improving access to banking services in Ethiopia on a wider scale.
It is reported that the population of Ethiopia is about a 100 million people and more than three quarters do not have any access to banking services so this investment is a major boost in bridging this gap. The additional investors include the European Investment Bank (EIB) and the Finnish development finance company Finnfund which has been a shareholder in M-BIRR since as early as 2012.
“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.
M-BIRR was inspired by the success story of the Kenyan provider M-PESA, which began in 2007. The company was created by Thierry Artaud and Jim Noctor in 2009. At year-end 2017, over one million customers were registered on the platform for mobile money transactions.
We understand six financial institutions in Ethiopia currently partner with M-BIRR to deliver the service. The new capital is earmarked for the business expansion and for increasing outreach in the country and this will create 60 new jobs at M-BIRR, with additional indirect employment of over 400 in the agents network.
A bit about the Africa focused German VC.
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.
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