After months of wrangling, the Ethiopian government has at last approved mobile money in the country and opened the door for banks and micro-finance institutions to provide transaction-based banking online.
The directive aims to push Ethiopias economy forward and has been welcomed by economists, who believe the governments decision will help spur growth in the East African country.
Clients of banks and MFIs will be able to make deposits and withdrawals through their mobile phones, the governments directive said. They can also make payments to businesses or transfer money to clients using their mobile phones.
It came after the National Bank of Ethiopia had previously turned down requests from banks in the country to allow mobile money transfers from occurring, but with mobile penetration remaining stagnant through the last quarter of 2012 and fears of an economic downturn in the country, the directive lifts previous limits to mobile banking.
With an estimated population of 91 million people, Ethiopia is Africas second largest nation and many analysts believe it will be the next frontier for mobile phone-led finance.
Ethiopia wants to introduce and bolster its telecom mobile banking sector with the countrys banks in order to make doing business and transferring money easier.