Nairobi — Safaricom Ethiopia has been granted a licence by the National Bank of Ethiopia, allowing the telco to expand its lucrative mobile money business to the untapped Horn of Africa country with over 100 million people.

The Payment Instrument Issuer Licence is the first to be issued to a foreign investor in the nation.

"The National Bank of Ethiopia has today issued a mobile money service license to Safaricom M-Pesa Mobile Financial Service Plc, a subsidiary of Safaricom Telecommunication Ethiopia Plc," the National Bank of Ethiopia said in a statement.

"This is the first mobile money license granted to a foreign investor in Ethiopia," it added.

With the new licence, the telco will now be able to offer services such as mobile banking, mobile wallets, internet banking, and card banking.

"The issuance of the mobile money license reflects the NBE's on-going objective of fostering financial inovation and inclusion in the Ethiopian market," it said.

"We welcome this shift to the use of digital financial services so as to bring greater efficiency, safety, and transparency to the country's rapidly growing financial system."

Only in October last year, Safaricom Ethiopia received a nod from the Ethiopian government to roll out M-Pesa.

The deal was brokered by President William Ruto and Ethiopia's Prime Minister Abiy Ahmed in Addis Ababa, Ethiopia.

"To this end, we will strongly support the spread of digital payment systems as a substitute for cash-based transactions within the economy," it said.

"We will also welcome the introduction of diverse forms of digital financial services so that, ultimately, these become a tool to help citizens transact, save, borrow, invest, and more as Ethiopia's financial system is modernized over the coming years," it stated.

"The National Bank of Ethiopia wishes Safaricom's M-PESA service well as it launches its operations in the very near future."