US remittance companies banned by Ethiopia's Central Bank due to allegations of fraudulent activities
Article Title: Ethiopia Cracks Down on Unauthorized Money Transfer Companies, Enforcing Financial Compliance
In a bid to safeguard the integrity of Ethiopia’s financial system, the National Bank of Ethiopia (NBE) has tightened its oversight on U.S.-based money transfer companies. In August 2025, four companies – Shgey Money Transfer, Adulis Money Transfer, Ramada Pay (Kaah), and TAAJ Money Transfer – were banned for operating without licenses and engaging in unauthorized cross-border transactions, including alleged money laundering [1][3][4].
The NBE is strictly enforcing compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations, requiring all remittances to be sent exclusively through licensed and regulated financial institutions [2][4]. This move aims to protect the formal financial system, ensuring proper oversight of remittance flows, which are critical for Ethiopia’s economy – remittances amounted to over $4.2 billion in 2022, about 5% of GDP [3].
The ban has sparked both support and scepticism among Ethiopians. While some appreciate the efforts to curb illicit activities, others fear the potential disruption of remittance flows, which could force some users towards informal, unregulated systems, especially in underserved regions [1]. The NBE has warned against using unlicensed money transfer operators due to risks such as seizure or non-delivery of funds [1][3][4].
The impact on diaspora remittances includes increased risk for funds sent through banned/unlicensed channels potentially being seized or failing to reach recipients [1][3]. It could also disrupt remittance flows, potentially pushing some users towards informal, unregulated systems, especially in underserved regions like Ethiopia’s Somali Regional State, where only about 6% of the population has formal financial inclusion [1].
To guide diaspora users to compliant service providers, the NBE has updated and published a list of all licensed money transfer agencies as of April 1, 2025, on their website: nbe.gov.et/mta [1][5]. The bank plans to continue monitoring and taking regulatory action against non-compliant operators to safeguard remittance integrity and foreign currency inflows [1][3].
Some have suggested that the NBE should offer incentives for legal transfers, such as easing outbound remittances for Ethiopians working with multilateral organizations or UN agencies [4]. The crackdown on money transfer companies could redirect remittance flows towards digital platforms with stronger oversight [4]. However, for this shift to be effective, the formal system must not only be secure but also competitive [3].
In summary, the Ethiopian government is enforcing strict licensing and compliance rules on U.S.-based money transfer companies to prevent illicit financial activities. This approach seeks to secure Ethiopia’s financial system while posing operational and accessibility challenges for diaspora communities depending on such remittances. The NBE's efforts to combat money laundering and ensure regulatory compliance are essential for Ethiopia's financial stability, but it's crucial to balance these efforts with maintaining service availability and accessibility for diaspora communities.
In an effort to maintain Ethiopia's financial stability and business integrity, the National Bank of Ethiopia (NBE) is enforcing strict compliance with anti-money laundering and counter-terrorist financing regulations, even in the realm of general-news related to cross-border finance and business [2]. The ongoing crackdown on unlicensed money transfer operatorsserves as a reminder of the risk associated with crime-and-justice issues like money laundering and the importance of adhering to legal channels for financial transactions [1][5].
