Ethiopia is set to introduce phone banking. With the booming economy and a population of 80 million this country could be the next gold mine for mobile banking companies.

Mobile banking has proved to be a lucrative venture in the developing world, where large parts of the population belong to the so-called "unbanked."  In Africa, only Ethiopia and Zimbabwe do not provide mobile money services.  That will change soon for Ethiopia.

BelCash and M-Birr are mobile banking technology providers that have been in Ethiopia for the last three years to set up mobile banking and mobile money services. 

Dutch company BelCash is focused on mobile banking, working in partnership with banks to provide easier access to finance through bank accounts. Ireland-based M-Birr is a mobile money service that works with micro finance institutions where no registration at a bank is needed.

The companies will face several challenges in Ethiopia. Half of the population is said to be illiterate, and the telecom coverage in the country is far from perfect. The pressure on the telecom network will increase as the number of Ethiopians owning a mobile phone increases.

In the last four years, the number grew from three million to 17 million users. And Ethiopia’s telecom provider, Ethio Telecom, expects that number to grow to 40 million in the next three years.

BelCash founder Vince Diop does not believe a limited network or high illiteracy rate will be a barrier for introducing mobile banking.

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