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HomeNewsEthiopost gears to diversify in to the financial industry

Ethiopost gears to diversify in to the financial industry

The only postal service provider in the country, Ethiopian Postal Service Enterprise (Ethiopost), has started its process to establish its own bank and a mobile money service. The bank is expected to have all kinds of banking services including digital finance and seeks to boost non-cash payments in the country.
The service provider is geared to have its own financial institution operated by the post office by providing customers with access of banking service, including direct deposit, cards, and online bill payments.
According to sources from Ethiopost, the enterprise has started its process to engage in the sector in accordance with the National Bank of Ethiopia’s regulation and guidelines. Last year, Ethiopia’s Central Bank issued regulations allowing non-banks to offer basic financial services, potentially opening the door for companies mulling a play in the wireless market by adding mobile money to their portfolios.
The CEO of the Ethiopian Postal Service Enterprise, Hanna Arayaselassie, said the enterprise is focusing on updating itself by providing a wide range of E-commerce and various financial services.
“We want to engage in E-commerce and support the nationwide vision of creating and expanding a digital economy. Ethiopost is ideally suited to make this reality through its extensive network of branches and years of experience in the logistic sector,” stated Hanna.
According to the CEO, Ethiopost has been through a series of losses over the past years as result of low staff motive and capability, poor customer service, weak marketing and traditional and outdated processes and services. This has rendered the enterprise to become uncompetitive in service provision as well as hindered its financial standing.
Starting from last year May, Ethiopost has been under reform, to secure firm financial standing in order to engage in new services including E-commerce and logistical financial services that offer competitive services as well as enhance the image of the service provider.
Accordingly, the enterprise is waiting for the government’s support to make sure Ethiopost continues providing this service whilst remaining competitive. “We have submitted our interest to the Ministry of Finance to make the financial standing of the enterprise stronger,” the CEO pointed out.
In the last six months of the current budget year, the service provider has earned 230 million birr in revenue from its service which enabled it to meet 91 percent of its plan. The number has shown 10 percent increase when compared with last year same period due to extensive cost reduction efforts.
During the stated time post, Ethiopost has handled more than 4 million in total mail traffic across its letter post, parcel post and EMS service. The EMS service took the lion share in terms of revenue contribution while the letter post accounted for the largest number of traffic.
In addition to its services, Ethiopost is planning to start giving door-to-door service for individual customers of which currently the service provider is giving door-to-door services to various government and non-governmental offices.
In addition to its classic mail service, complimentary services such as passenger post bus services, logistic and moving services, financial services and goods distribution has collectively contributed to 10 percent of the total revenue. According to Hanna, even if currently cross country service of the post bus has been stopped there are plans to restart the operation.
Given the rich history of the service provider that spans 127 years with close to 900 branches throughout the country, the CEO acknowledged that Ethiopost has not been profitable for a while as is expected. However, she echoed that the recent reform since last May that aims to modernize its work as well as optimize its operation and quality of service is the right step in terms of moving the enterprise forward.
As the CEO highlights, in order to enhance its capacity, Ethiopost is optimizing its resource and producers by automated system of IFRS and ERP. “These methods could help us know and manage the overall resource thus aiding to minimize cost whilst increasing revenue,” she remarked.
The IFRS implementation is expected to be completed towards the end of the current budget year, which was started four years back, according to Hanna.

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