Kacha steps foot independently in the digital finance space
New mobile money service provider, Kacha Digital Financial Services S.C has been licensed to be a private mobile money platform and now joins the financial industry despite it not being owned by a financial institution. Earlier this week Kacha received its license from the National Bank of Ethiopia to join the market.
Founded by 13 Ethiopian techies and entrepreneurs, Kacha was registered with a subscribed capital of 200,000 million birr based on the payment service proclamation 718/2011 and the NBE directive ONPS/01/2020.
“The issuance of this license distinctly marks the beginning of a new era for broader participation of the private sector in the national digital financial services landscape as much as it does as a defining milestone to the team of founding shareholders and professionals involved in its establishment for the past three and half years,” Kacha underlined. According to the company, Kacha has already brought on board more than 30,000 agents across the country which is said to reach over 85,000 within six months. Aimed to provide cashless transaction, the firm intends to unlock possibilities for users by providing access to affordable, convenient, and secure digital financial services that drive sustainable growth, enhance access to finance, and improve citizens' livelihood.
The services Kacha provides is said to include; the opening of wallet accounts, cash-in, cash-out, micro saving, uncollateralized micro credits, micro insurance, direct payments, bill payments, international remittance, fund transfer, airtime top-up, card payments, and other innovative services, which will ultimately boost financial inclusion and help the country to attain its aspirations of meeting national development goals including the SDGS.
“Kacha's vision is closing the existing gaps to change the face of digital financial services in Ethiopia through availing innovative, affordable, seamless, and value-adding business propositions including bringing financial inclusion, Empowering citizens” said Yigermal Meshesha, marketing and business development manager at Kacha. Kacha Digital Financial Services S.C is composed to play a key role in driving the journey towards the empowerment of citizens by bringing meaningful financial inclusion through innovative product and market approach designs after dedicating years of development and institutional preparation led by Ethiopian developers along with international experts.
The National Bank of Ethiopia has also approved the appointment of 7 Board of Directors and the appointment of Abreham Tilahun Abera, as the founding Chief Executive Officer of Kacha Digital Financial Service. Abreham had been serving Lion International Bank for more than 2 years as the acting vice president and has an ocean of experience in vast banking operations which spans 16 years. The development of the mobile money ecosystem in Ethiopia can generally be defined as early stage. The mobile money ecosystem in Ethiopia follows a bank-led model whereby banks and microfinance institutions (MFIS) partner with a technology provider to offer the service as the sector has been closed for both local and foreign fintech firms. Until recently, fintechs were barred from providing digital financial services (DFS) on their own and had to partner with financial institutions as system suppliers, constraining their growth.
This ban ended in 2020 with the introduction of two laws that opened up the sector. This meant fintechs could now operate independently and many startups were quick to try and take up the opportunity.
Over a year ago, Ethiotelecom’s mobile money platform telebirr became the first fintech platform in Ethiopia that’s was not owned by a financial institution. Telebirr has now over 21 million subscribers.