Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

FinTech

Central Bank of Somalia issues first mobile money license

Article Image
Somali operator, Hormuud Telecom, has been granted the country's first mobile money license from the Central Bank of Somalia, a move it says will give users the reassurance that their money is guaranteed and regulated by a bank.

Hormuud Telecom's mobile money platform, EVC Plus, already has 3 million users but the operator says it will now be formally regulated and financially backed by the Central Bank of Somalia.

"EVC Plus customers can now be assured that the digital dollars that are transferring via the platform are properly regulated and guaranteed by the Central Bank of Somalia. This is necessary because Somalia is becoming the world's first cashless country," a Hormuud Telecom spokesperson told Connecting Africa.

"The Somali shillings in circulation were predominately counterfeit and were experiencing mass inflation, and therefore as the economy dollarised this section of the financial system needed to be formally regulated," they explained.

It is estimated that over 95% of physical Somali shillings are counterfeit, with over two-thirds of all payments now made via mobile money platforms in Somalia.

The move by the bank formalizes digital payments as the primary payment method within the country and will enable further integration of the Somali financial system with the international financial system.

The spokesperson said there will be no changes made to the day-to-day service of the EVC Plus platform, but it will give customers the reassurance that their money is guaranteed and regulated by the Central Bank.


Want to know more about mobile money and mobile financial services in Africa? Check out our dedicated Fintech content channel here on Connecting Africa.


Hormuud also expects the move to help boost the Somali economy and create a more solid local foundation for international investment, "as regulation now meets the level expected by international banks and insurers."

According to Omdia data, Hormuud had around 6.6 million customers at the end of September 2020, taking up 40% market share in the country. The next biggest operator is Nationlink Somalia with 16% and Telcom with almost 15%. The rest of the market share is spread out between six other smaller players.

Cashless culture

EVC Plus was launched in 2011 as the first mobile money platform within Somalia. Now Hormuud says it's the most widely used payment method by Somalis and differs from many other mobile money platforms in Africa by being free. The platform has also enabled vulnerable communities across the country to access the financial system.

"Mobile money is one of the most vital pieces of infrastructure for a functioning Somali economy, and is relied upon by Somali people. The news today cements what we've known for a long time, that Somalia is moving towards being the world's first truly cashless economy," said Hormuud Telecom's CEO Ahmed Mohamud Yuusuf.

Hormuud Telecom CEO Ahmed Mohamud Yuusuf
Hormuud Telecom CEO Ahmed Mohamud Yuusuf

"This accreditation is the next step along the path to a prosperous Somali economy. Establishing a more stable regulatory framework will benefit consumers and businesses within Somalia, as they can rest assured that their mobile money is reliable and accredited," Yuusuf added.

"For over two years we have worked tirelessly to develop an internationally recognized regulatory framework for the financial system. This license is the culmination of these efforts and ensures that digital payments are financially guaranteed by the Central Bank. As a result, Somali businesses, international investors and NGOs can continue to use Hormuud's EVC Plus with renewed confidence," said Abdirahman Mohamed Abdullahi, Governor of the Central Bank of Somalia.

"In formalizing our existing digital payments infrastructure, we are accelerating the integration of Somalia's financial system into the global economy," the Governor concluded.

Related posts:

*Top image source: Technology photo created by rawpixel.com - www.freepik.com.

Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Africa can leverage GenAI for economic growth – Microsoft

A whitepaper on generative artificial intelligence (GenAI) and the future of work has found that the African continent, with its young population, can leverage AI to drive economic growth.

Registration opens for Africa Tech Festival 2024

Registration has opened for the 2024 edition of Africa Tech Festival, the continent's leading platform for technology innovators, specialists and thought leaders.

More Innovation hub

Latest video

More videos

Partner perspectives

All Partner Perspectives

Sponsored video

More videos

Follow us on X

Industry announcements

More Industry announcements

Upcoming events

Cyber Revolution Summit
August 9, 2024
Gaborone, Botswana
Africa Tech Festival 2024
November 11-14, 2024
Cape Town, South Africa
More Upcoming events

Africa Tech Perspectives

Story

Uber's Marjorie Saint-Lot on inclusion and sustainability in Africa

Uber's Country Manager for Ghana and Cote d'Ivoire, Marjorie Saint-Lot, shares how the ride-hailing company is approaching public-private partnerships, environmentally friendly initiatives and gender inclusion in Africa.

Story

The 100 most influential African leaders in 2023

A new report from Africa Tech Festival and Connecting Africa puts a spotlight on the top 100 African leaders in the telecoms and technology sector in 2023.

Story

Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Africa Tech perspectives

Guest Perspectives

Story

How e-mobility could transform Africa's transport sector

By Francis Hook

ICT analyst Francis Hook delves into Africa's e-mobility sector and unpacks the challenges faced locally and the benefits the move to electric vehicles could bring to urban transport systems.

Story

Omdia View: April 2024

By Omdia Analysts

April 2024's telecoms highlights in the Middle East and Africa included a license for Starlink in Ghana, new mobile termination rates in Ethiopia, and 6G trials in Bahrain – that and more in the latest Omdia View.

More Guest Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up
Tag id test-002