Once upon a time in Ethiopia, an unexpected story unfolded about a devoted father. In this tale, digital lending had gained immense popularity, revolutionizing the loan evaluation and disbursal process through the aid of computers. To streamline the cost-saving measures, loan collections were automated. However, for this system to operate seamlessly, it required robust frameworks like credit scoring systems and reliable forms of identification.
Among the frontrunners in digital lending was Ethio Telecom, catering to a staggering two million individuals who relied on airtime credit each month. In the past two years, Telebirr emerged as a dominant player, attracting a whopping 30 million users, supported by 101 thousand agents and 28 thousand merchants. It had established connections with 19 commercial banks and facilitated foreign remittances amounting to USD 1.95 million.
Within this landscape, a remarkable microcredit service called Telebirr Mela emerged, granting loans worth 2.1 billion Ethiopian Birr to 1.4 million people. Additionally, it facilitated savings of 1.7 billion Ethiopian Birr in the Telebirr Sanduq. Michu, a collateral-free digital lending product powered by Kifiya Financial Technology’s Qena, stood out by successfully recovering the 130 million birr it had previously loaned.
Michu, originating from the Cooperative Bank of Oromia (COOP), had disbursed over 200 million birr in loans since its launch in May 2022. Its primary focus was to support small businesses engaged in roadside sales or operating on a very small scale.
In this extraordinary tale of digital lending in Ethiopia, the Ethiopian Father found himself intertwined with the transformative power of technology and finance. With the assistance of innovative platforms like Telebirr and Michu, countless individuals were empowered to fulfill their dreams and aspirations, contributing to the economic growth of the nation.