The National Bank of Ethiopia (NBE) has blacklisted four remittance companies based in the United States—Shgey Money Transfer, Adulis Money Transfer, Ramada Pay (Kaah), and TAAJ Money Transfer—accusing them of operating without proper authorization and facilitating illegal cross-border transactions. The decision, announced through a public advisory, comes amid growing efforts by Ethiopian authorities to regulate remittance flows and reduce illicit financial activity.
Ethiopia’s economy relies heavily on remittances, which totaled more than $6 billion in 2024. A substantial portion of these funds comes from Ethiopians living abroad, especially in the United States. Remittances serve as a crucial source of household income and are essential for maintaining foreign exchange reserves.
However, the National Bank of Ethiopia banned the four US-based remittance firms citing their failure to comply with licensing requirements and concerns over money laundering. The NBE noted that the companies were engaging in financial activities without its approval and outside the formal banking system.
This move coincides with the rollout of the Foreign Exchange Directive (FXD/01/2024) on July 29, 2024, which shifted the country to a market-based exchange rate regime in an attempt to reduce reliance on black-market transactions and improve foreign currency access through regulated channels.
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Details of the Banned Remittance Firms in Ethiopia
The banned firms, three located in Virginia and Maryland and one in Minnesota, had reportedly been serving members of the Ethiopian diaspora for years. According to the NBE, the four companies violated national regulations by:
- Operating without NBE licenses
- Conducting unauthorized cross-border transactions
- Participating in money laundering and suspicious financial activity
Among the firms, TAAJ Money Transfer had a previous criminal case in the United States. The company pleaded guilty in U.S. federal court to violating the Bank Secrecy Act. This background contributed to the NBE’s decision to include it in the ban.
Reasons the NBE Banned Four US-Based Remittance Firms
The National Bank of Ethiopia outlined several key reasons behind its decision:
1. Unlicensed Operations
The four firms were not licensed by the NBE to offer remittance services in Ethiopia. Operating without a license violates Ethiopian financial regulations, which require all foreign exchange and money transfer providers to be vetted, supervised, and approved by the central bank.
2. Money Laundering and Illicit Finance
The NBE accused the companies of facilitating money laundering by transferring funds collected from the diaspora through unregulated channels. The ban is part of broader efforts to reduce the use of informal remittance systems, like Hawala networks, that have historically undermined Ethiopia’s financial integrity and are difficult to monitor.
3. Risk to Consumers
Consumers who use unregulated money transfer services risk loss of funds, seizure, or non-delivery. The NBE highlighted that customers should only use registered providers listed in its official directory of 88 licensed money transfer operators, including global firms like Western Union, MoneyGram, and locally integrated banks.
4. Economic Stabilization and Currency Reform
The ban aligns with Ethiopia’s new approach to managing foreign exchange. The recent shift to a market-driven exchange rate and reforms in the financial sector are meant to boost transparency, channel remittances through official systems, and stabilize foreign currency reserves. With remittance flows being outpaced by export earnings for the first time in years, Ethiopia’s government is keen to formalize and monitor every dollar entering the economy.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.