Hormuud Telecom’s mobile money platform, EVC Plus, will now be formally regulated and financially backed by the Central Bank of Somalia.
The move formalised digital payments as a payment method within the country and will enable further integration of the Somali financial system with the international financial system.
Speaking on the announcement, Governor of the Central Bank of Somalia Abdirahman M. Abdullahi said: “We are pleased to issue Hormuud Telecom with Somalia’s first ever mobile money licence.
“For over two years we have worked tirelessly to develop an internationally recognised regulatory framework for the financial system. This licence 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.
“In formalising our existing digital payments infrastructure, we are accelerating the integration of Somalia’s financial system into the global economy. ”
EVC Plus was launched in 2011 as the first mobile money platform within Somalia. Now the most widely used payment method by Somalis, Hormuud said it differs from many other mobile money platforms in Africa by being totally free at the point of use.
Hormuud Telecom’s CEO Ahmed Mohamud Yuusuf (pictured), said: “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. This issuing of a mobile-money licence for the first time is arguably one of the most important steps taken by Somalia since the end of the war.
“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.”
Mobile money is a major driver for mobile operators across Africa with the likes of Africell, Airtel Africa and MTN all announcing major developments over the last 12 months to capitalise on the large number of unbanked and underbanked citizens.
However, in Somalia the use case is even stronger; there it is estimated that more than 95% of the physical Somali shilling is counterfeit, with over two thirds of all payments made in Somalia via mobile money platforms.
