Safe and cashless payments

With M-BIRR, Ethiopians can now transfer money using their mobile phones without having a traditional bank account or Internet access. DEG – Deutsche Investitions- und Entwicklungsgesellschaft has made a EUR four million investment in the company, thereby enabling it to grow further. The two founders are now reaping the first rewards for ten years of hard work.

About the founders
Thierry Artaud, Jim Noctor

Jim Noctor (left) and Thierry Artaud are the founders of M-BIRR. They want to provide access to financial transactions for the people in Ethiopia with M-BIRR.

The working day for Fatuma Dale starts at five o'clock in the morning. She works full time in a brewery. Fatuma Dale has used some of her savings to build a house. A nice place for the family to live, painted in cheerful pink and dark green. She receives her wage via mobile phone. "This maintains my independence", says Dale in a film made by M-BIRR, which informs about this new financial service.

Birr is the Ethiopian currency. The cashless money transfer system enables the user to pay by mobile phone or send money to relatives and friends. This does not require either a traditional bank account or Internet connection. It is the first mobile money platform in Ethiopia.

Situated on the Horn of Africa, the country is on the move: political thawing, peace with neighbouring Eritrea after decades of war, economic reforms. But in 2009, when Thierry Artaud and Jim Noctor founded M-BIRR, it was not clear which direction Ethiopia, which remains one of the least developed countries in the world, would take.

Well connected

M-BIRR also benefits the poorer rural population. It is not strictly necessary to have an account to use the service. Users must not even be in possession of a mobile phone.

Bold company foundation

The Frenchman Thierry Artaud and the Irishman Jim Noctor were once colleagues in a software company in Dublin. That's almost 30 years ago. Thierry Artaud's investment firm had been struggling with the consequences of the global financial crisis since 2007. That was the foundation stone for M-Birr. "My company had no future. That's when Jim came to me with the idea of starting a mobile payment company. So we took the plunge together, and here we are now, ten years later. We've been through a lot, but we're still here", says Artaud, looking back.

Their idea was inspired partly by M-PESA, the successful counterpart from neighbouring Kenya. "We saw how well some companies were doing in this area and we took a closer look at the market to find out what opportunities were available to us", so Noctor. The two men chose Ethiopia – a courageous step.

“What we want to achieve is that Ethiopians think: I want to use that, it solves my problem.”

Thierry Artaud, founder of M-BIRR

Easy to operate

By entering key combination *818# the user gets to the M-BIRR service and can, for instance, send money. If the recipient is not registered with M-Birr, she or he receives a voucher code which can be exchanged for money at an agent.

Networking and financial inclusion

The two founders were aware of the challenge they faced, but they had a different focus. Noctor explains: "At the time, hardly anyone saw the potential in a service of this nature: providing people in Ethiopia with access to payment transactions and contribute to financial inclusion.”

More than three quarters of the more than 100 million Ethiopians do not have any access to banking services. The number of mobile phone subscribers, in contrast, has been rising continuously for years. Whereas in 2008 the figure was only 2.3 million, ten years later it had already risen to 40 million. The expansion of the mobile network has also connected sparsely populated areas to the communications network.

M-Birr shop
Shopping assistant

Paying for groceries at the weekly market gets easier with the mobile payment system. What is important is that the retailer is registered there.

Customer agents are spread all over the country

To use the M-BIRR service, an account must be set up first. The potential user must go to either a financial institution or an agent, register and submit a copy of their ID. The practical side: "The agents can be a shop, a petrol station, a café or a restaurant, in other words any kind of business. We already have more than 6,500 agents across Ethiopia to whom people can go", says Artaud.

These accounts are administered by microfinance institutions (MFIs). These are organisations that offer financial services to individuals who lack access to conventional banking services. A settlement account is opened with a MFI for each user. As six different MFIs in the country offer the service, it was possible to establish a comprehensive network.

Team M-Birr

The number of staff in Ethiopia is rising steadily (team in Addis pictured here). Thanks to DEG’s investment 60 new jobs have been created.

Service available even without a phone

Users can make transfers, deposits and withdrawals on the platform. In addition, they can easily pay for their shopping or bills by mobile phone – provided, of course, that they have loaded money into their M-BIRR account. This is something they can also do at one of the MFI branches or at one of the agents.

To keep M-BIRR simple, the platform uses USSD codes. These are the service and control commands on the GSM mobile network. Users dial *818# on their mobile phone and a menu in their language opens up. M-BIRR users can now, for example, query their available balance, transfer money or pay bills. This also works with older phone models, which most people in Ethiopia still use. Hardly anyone has a smartphone there.

But there is much more to it than that: users must not even be in possession of a mobile phone. Those who can't afford one, get a scratch card with a PIN instead. They then enter this number into a device at the agent and receive the money. In this way even the poorest are no longer excluded from the financial system.

1.2 million registered users

The advantages of this payment service: it works quickly, easily, securely and 24x7. M-BIRR is a real benefit for the rural population in particular, as there are only a few financial institutions in the countryside. M-BIRR agents close this gap by accepting cash deposits or paying out cash that the user has stored on the mobile phone.

The latest figures show that, despite a difficult start, Jim Noctor and Thierry Artaud correctly recognised the need in Ethiopia: their company now has 76 permanent employees and 52 temporary workers, plus 531 sales representatives on a commission basis. M-BIRR has around 1.2 million registered users; up to 1.8 billion Birr (around 56 million euros) are transferred via the platform each month (as of October 2018). This figure continues to rise.

Artaud and Noctor want to reach more people by advertising on television and radio, while employees' vehicles are branded. In addition to the mascot (a pelican), the slogan "The solution is in your hand" also provides a recognition factor. Many Ethiopians already know this slogan. “But this does not necessarily mean that they understand how the service can help them", Artaud points out.

Another important factor for being perceived as a beneficial product is word-of-mouth marketing. Customers talk to their family, friends and neighbours about M-BIRR – after all, it's about money. "If, for example, ten M-BIRR users live in a small town, you can be sure: soon the whole town will know about M-BIRR”, explains Artaud.

We finance

DEG offers long-term financing and packaged solutions for companies and has provided M-BIRR with equity capital to the amount of four million euros.

Learn more

Expanding financial services to catch up

The platform is urgently needed in Ethiopia as it closes a huge gap in the financial system. M-BIRR is the only way to make a simple transfer between two different credit institutions within the country. The reason: there is still no functioning interbank clearing system.

But people are still not used to cashless payment. True to the ancient motto "Cash is king", many Ethiopians cannot imagine a life without cash. "Ethiopia is lagging far behind other neighbouring countries such as Kenya and Rwanda when it comes to financial services. This is due partly to the low level of education. So the country has a lot of catching up to do", says Noctor.

Jim Noctor and Thierry Artaud, who spend a lot of time in Ethiopia themselves and know the problems faced by the people as well as their mentality, want to continue playing an important role in this catching up through their platform. Investors are particularly important for growth, and this is where DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, comes in. DEG has taken a EUR four million stake in M-BIRR. Further investors include the European Investment Bank (EIB) and Finland’s development finance institution Finnfund.

“My mobile phone isn’t just my phone, it’s also my wallet.”

Biniam Tesfu, M-BIRR user

Top priority now is to expand the network

"We decided to invest in M-BIRR for several reasons: we were won over by the predominantly local management team, the charismatic founders and the interesting business model with future potential, which promises an enormous and positive impact in terms of developmental policy", explains Maxim Meyer, Senior Investment Manager at DEG and member of the M-BIRR Supervisory Board. The investment will create, among other things, 60 new jobs, with almost 2,400 new agents added in 2018. This will not only enable the company to develop its business activities, but also expand its reach throughout the country.

According to Meyer, the networking idea behind M-BIRR was also very well received: "The more customers there are in the network, the greater the benefit for each individual. That's why the priority in the current phase is to raise M-BIRR's profile and attract as many new customers and agents as possible."

Artaud and Noctor are pleased about the popularity of their platform. "The fact that DEG is investing in us is also an opportunity to get further investors on board. If such a well-known company believes in us, it also strengthens other companies' confidence in us”, say the two founders. The top priority is growth and technical operability, so that as many Ethiopians as possible benefit from the product.

Artaud and Noctor believe that M-BIRR is useful for every Ethiopian. For example for the young man who works in the city and wants to send most of the money he earns to his parents so that they can also live on it. Or for the farmer who takes up work temporarily because the yield from his harvest is not enough for a full year, and he needs the wages quickly to provide for himself. And for Biniam Tesfu, who appears in the M-BIRR film next to Fatuma Dale, the women employed in the brewery, and who pays his clothes, his groceries or his pizza by mobile phone. M-BIRR is having an impact – to a considerable extent.

This is also due to the low requirements for joining. All that is needed is the decision to set up an M-BIRR account with an agent or one of the participating financial institutions – nothing more. "Users receive money quickly, securely and above all without additional costs. This makes a huge difference to their lives. We want to find more investors and supporters. To achieve this, we must continue to overcome challenges. But the need for what we offer is there, and that's what drives us - every day", says Artaud with conviction.

Published on KfW Stories: Tuedsday, 9 July 2019


All United Nations member states adopted the 2030 Agenda in 2015. At its heart is a list of 17 goals for sustainable development, known as the Sustainable Development Goals (SDGs). Our world should become a place where people are able to live in peace with each other in ways that are ecologically compatible, socially just, and economically effective.