Ethiopia’s National Bank (NBE) has doubled the minimum capital requirement for non-bank mobile money operators, in an effort to consolidate the rapidly expanding but fragmented digital finance industry.
The National Bank of Ethiopia (NBE) raised the minimum paid-up capital from 50 million birr to 100 million birr, rescinding its earlier directive on Payment Instrument Issuers (PIIs) in a memo dated May 12 and reaffirmed by the apex bank in a statement on Tuesday.
The requirement is effective immediately for current and potential PII—non-bank entities authorised to issue and manage electronic money.
Enhancing financial inclusion
The directive coincides with a nationwide explosion in mobile-based financial services, fuelled by government initiatives to increase financial inclusion and the quick expansion of wallet-based platforms. However, the industry has been characterised by unequal regulatory supervision, market concentration, and limited service provider interoperability—problems that the central bank seems keen to resolve.
The goal of the updated capital threshold is to guarantee that issuers of payment instruments have the financial capacity to facilitate more secure operations and wider access.
The new directive’s requirement that all PIIs allow their users to send and receive money across competing digital wallets is one of its most important clauses. Closed-loop systems that gave powerful companies the ability to ringfence their networks and restrict consumer choice are now obsolete.
Wallet-to-wallet transfers must only be made via the national switch EthSwitch or other NBE-licensed operators starting in November 2025. Interoperability of any kind outside of these frameworks is specifically prohibited. It is anticipated that the action will dismantle the silos that have frequently prevented users of one platform from conducting smooth transactions with those of other platforms in Ethiopia’s mobile money market.
Revised transaction limits
Additionally, the directive recalculates important operational parameters for digital wallets known as Level 2 accounts, which permit higher transaction ceilings in return for stronger customer identification.
Daily balances, person-to-person (P2P) transfers, and person-to-merchant (P2M) transactions are now subject to new restrictions. Although the central bank has not yet released precise The thresholds, specifically those implemented through Ethiopia’s standardised QR code system, are now subject to capped volumes.
With the exception of the capital requirement, which is already in place, PIIs have been given a six-month window to implement all requirements.
Development of non-bank mobile money operators in Ethiopia
In 2021, Ethiopia became one of the last major African economies to grant licences to non-bank mobile money operators. Since then, tens of millions of people have used services like Telebirr, run by state-owned Ethio Telecom, which has changed the way that remittances, savings, and payments are handled throughout the nation.
But the regulatory framework hasn’t been able to keep up with market innovation, which has led to worries about consumer protection, data privacy, and financial stability.
The most recent directive comes after a number of financial sector reforms in Ethiopia, such as initiatives to open banking services to foreign investment and the adoption of digital IDs to expedite customer onboarding and compliance.
According to industry analysts, the capital increase may discourage early-stage startups or smaller entrants, but it may also strengthen market discipline and lower systemic risks. It is anticipated that larger players, especially those already supported by telecom or banking behemoths, will quickly adjust.
However, by compelling dominant platforms to open up, the mandatory interoperability clause may help level the playing field for smaller businesses.
Key highlights of the reform
The directive seeks to guarantee fair competition and interoperability among mobile money issuers, enhance the safety, inclusivity, efficiency, and dependability of the digital payment ecosystem, and encourage the nationwide adoption of instant payments. The directive contains the following significant changes, among others:
• Increasing the daily electronic money balance to 150,000 Birr and the daily transaction limits to 300,000 Birr.
• Requires mobile money wallets to be interoperable with one another, facilitating smooth cross-platform fund transfers for increased user convenience.
• In order to guarantee quick transaction processing and advance financial inclusion, financial institutions are required to take part in the Ethiopian Instant Payment Systems (EIPS).
• Increasing to 100 million Birr the amount of capital needed to establish a Payment Instrument Issuer business.
Ethiopia Finance Forum 2025: Engagement to enhance financial inclusion
The National Bank of Ethiopia recently hosted the Finance Forum 2025, a two-day event held in Addis Ababa from May 15 to 16. To discuss the future of the nation’s financial sector, the forum brought together a wide range of participants, including academics, representatives of civil society, private sector leaders, policymakers, financial institutions, members of the Ethiopian diaspora, and development partners.
The Forum offered a crucial forum for discussing potential investments, encouraging cooperation, and reaching consensus on the direction of Ethiopia’s financial system. The main topic of discussion was how Ethiopia can improve its financial system even more to promote equitable growth and increase financial accessibility.
The Mastercard Foundation was one of the participants, sharing insights from its ongoing work to support micro, small, and medium-sized enterprises (MSMEs) in Ethiopia that are led by women and youth. The Foundation develops customised financial products and digital lending models in collaboration with financial institutions and fintech firms to expand financing access.
Participants in the Forum shared their experiences from programs funded by the Foundation. These initiatives seek to provide financial resources and business development services to underserved populations, especially women, young people, those with disabilities, and those living in rural areas.
SAFEE (Sustainable Access to Finance to Enable Entrepreneurship), a collaboration between Kifiya Financial Technologies and the Mastercard Foundation, is one such project. With the help of digital financial services, financial literacy education, and credit access tools, SAFEE aims to reach 2.18 million youth.
Numerous speakers at the forum pointed out that customised financial services, particularly those that use digital tools, can contribute to increased resilience and economic participation.
The importance of creating an inclusive financial system that supports the goals of women, young people, and individuals with disabilities was reaffirmed at the conclusion of Finance Forum 2025. The Mastercard Foundation is still dedicated to collaborating with various stakeholders to establish a supportive atmosphere for significant, long-lasting transformation in Ethiopia’s financial industry.