Peter Ndegwa, CEO of Safaricom PLC, speaks at a past event
Millions of Ethiopians have signed up for Safaricom’s M-Pesa mobile money platform, but the service is generating only a fraction of the revenue it earns in Kenya—underscoring the difficulty of monetising digital financial services in a largely cash-based economy.
Since its launch in Ethiopia in August 2023, M-Pesa has expanded rapidly, attracting more than 2.36 million users in just over two years. However, Safaricom says most subscribers mainly use the platform to buy airtime and data rather than conduct chargeable financial transactions. These purchases do not attract transaction fees, significantly limiting revenue growth.
This usage pattern stands in sharp contrast to Kenya, where M-Pesa is deeply embedded in daily life, powering urban-to-rural remittances, bill payments, retail transactions and digital credit products.
Ethiopia’s low level of formal financial inclusion further constrains adoption. A 2021 World Bank report shows that only 11 percent of Ethiopians have accessed a loan from a regulated financial institution, with many households relying instead on informal savings groups, community lending schemes or family networks.
The impact is evident in the numbers. For the nine months to December 2025, M-Pesa Ethiopia generated just Sh12.2 million in revenue—equivalent to about 50 cents per user per month.
By comparison, M-Pesa in Kenya generated Sh161.1 billion in the year ended March 2025, contributing 44 percent of Safaricom’s total service revenue and cementing its position as the company’s most profitable business segment.
In Ethiopia, M-Pesa’s contribution remains marginal. The platform accounted for only 0.13 percent of Safaricom Ethiopia’s Sh9.7 billion service revenue over the nine-month period. Data services dominated at nearly 67 percent, followed by voice at 22 percent, while messaging contributed just over one percent.
Despite the modest returns, Safaricom is playing a long-term game. Late last year, the telco integrated M-Pesa with EthSwitch, Ethiopia’s national payment switch, enabling real-time wallet-to-bank and bank-to-wallet transfers. The platform now supports interoperable QR payments accepted by more than 50,000 merchants nationwide.
Safaricom’s phased rollout strategy prioritises scale over immediate monetisation. In its first full month of operation, M-Pesa processed transactions worth Sh43.7 billion from 1.1 million users but generated only Sh7.2 million in revenue.
With a population exceeding 120 million, Ethiopia represents one of Africa’s largest untapped mobile money markets. Analysts say that while early revenues are underwhelming, the combination of demographic scale, ongoing financial sector reforms, and improving digital infrastructure could deliver significant long-term upside once digital payments gain wider acceptance.
By Bashir Wako
