Hormuud Telecom’s New Banking Partnerships: A Leap Towards Financial Inclusion in Somalia
Hormuud Telecom, Somalia’s leading telecom and mobile money operator, has recently made headlines by announcing two significant banking partnerships aimed at enhancing interoperability with its mobile money service, EVC Plus. This strategic move is set to revolutionize the financial landscape in a country where digital money services are not just popular but essential.
The Partnerships: MyBank and Agro Bank
The partnerships with MyBank and Agro Bank mark a pivotal step in integrating EVC Plus with formal banking services. This integration will allow users to seamlessly transfer funds between their mobile wallets and bank accounts, thereby bridging the gap between mobile money and traditional banking. The announcement was made during Hormuud Telecom’s annual Somali Success Stories Conference held in Mogadishu, attended by key government officials, including the Somali Prime Minister and the Minister of Communications and Technology.
EVC Plus: A Dominant Force in Mobile Money
EVC Plus stands as Somalia’s largest mobile money platform, reflecting the country’s heavy reliance on digital financial services. Local statistics reveal that over 70% of Somalis possess a mobile money account, while only about 15% have a traditional bank account. This disparity underscores the importance of mobile money in daily transactions and financial management for the majority of the population.
Advancing Financial Ecosystem
Hormuud Telecom’s new banking partnerships aim to create a more inclusive and efficient financial ecosystem. By connecting the mobile money network with formal banking, the operator is taking significant strides toward financial inclusion. Prime Minister Hamza Abdi Barre emphasized the government’s commitment to fostering an environment conducive to innovation and financial security, stating that the fintech sector is poised to accelerate Somalia’s economic growth.
Somalia’s Financial Sector Digital Transformation
The timing of these partnerships coincides with a broader transformation within Somalia’s financial services sector. The Central Bank’s launch of the National Payment System (NPS) in 2021 laid the groundwork for integrating banks and mobile money providers, enabling secure and real-time transactions. Hormuud, MyBank, and Agro Bank are set to leverage this infrastructure to enhance user experience and accessibility.
Empowering Users Through Interoperability
With the new integrations, EVC Plus users will be able to perform essential banking functions directly from their mobile devices. This is particularly beneficial in underserved rural areas where traditional bank branches are scarce, yet mobile phone usage is widespread. Hormuud Telecom has highlighted that this interoperability is crucial for enhancing financial access and empowering users across the country.
The Growing Fintech Sector in Somalia
Somalia’s fintech ecosystem is rapidly expanding, driven primarily by mobile money innovations. According to the Somali Central Bank, the nation processes over 650 million mobile money transactions annually, amounting to a staggering $8 billion. However, the traditional banking and mobile money systems have often operated in silos, limiting users’ engagement with the broader financial system.
Hormuud Telecom’s CEO, Ahmed Yusef, described the partnerships as a major milestone in Somalia’s financial evolution. By integrating mobile money with formal banking services, the company aims to turn financial exclusion into opportunity. This integration will facilitate access to credit for small businesses, help aid beneficiaries build financial histories, and simplify cross-border transactions.
Future Plans for Financial Integration
Hormuud Telecom envisions a future where interoperability across Somalia’s financial landscape enables greater participation in the formal economy. The company plans to expand its integrated system to all 13 commercial banks in Somalia by 2025, paving the way for new financial products and services, including mobile loans, savings accounts, and investment opportunities.
Addressing the Talent Shortage in Fintech
Despite the promising growth in the fintech sector, a talent shortage remains a significant challenge. Data from the Somali Research Association indicates that the sector currently employs between 7,000 and 10,000 individuals, with job growth projected to rise by 15%-20% by 2027. However, many startups and established companies report difficulties in finding qualified candidates for fintech-related roles.
Hormuud Telecom’s Pioneering Role
As Somalia’s largest telecommunications and mobile money provider, Hormuud Telecom has been at the forefront of the country’s digital transformation. The company was issued the first mobile money license in March 2021 and has since launched a 5G network, further enhancing its service offerings.
Agro Bank, founded in February 2019, aims to promote the growth of Somalia’s agricultural sector, while MyBank was established in 2018 to address the significant gap in financial services. Together, these institutions are poised to reshape the financial landscape in Somalia, making it more inclusive and accessible for all.