Bharti Airtel has announced plans to start cross-border mobile money services in East Africa next month.

The service will enable Airtel Money customers to send, receive and withdraw money from their Airtel Money accounts cross the region.

The telecom company also slashed its transfer rates from 10 per cent to 2 per cent.

The pilot phase of the firm Airtel Money service will fully kick off on November 1, with the first phase targeting Kenya, Uganda, Tanzania and Rwanda, Chidi Okpala, the Airtel Africa director and Airtel Money head, said.

This follows an approval by central banks of Rwanda, Kenya, Tanzania and Uganda to launch the initiative.

The next phase of this initiative will roll out the service to other Airtel operating countries next year, Okpala said. He was speaking during the 2014 East African Business Summit in Kigali yesterday.

He said the initiative is key milestone for Airtel Money customers "because a big virtual barrier has been removed to allow customers to transact with ease, across national borders”. The service will extend convenience by way of cost efficiency and reach while facilitating remittances and small trades within East Africa,” he noted.

"This will not only increase mobile money penetration amongst countries but will also create business opportunities. Mobile money remains a key element in boosting financial inclusion in East Africa. This is also a confirmation of the broader commitment of the Governments of Rwanda, Uganda, Kenya and Tanzania in improving trade and commerce activities within the region,” Okpala added.

The pilot project will also enable Bank of Africa (BOA) customers in Kenya and Uganda to send and receive money across the two countries.

"According to the East Africa Community, mobile commerce is gaining importance in the region for its huge role in speeding up transactions – saving time and money for people and businesses.

"The introduction of more sophisticated financial services, such as credit, savings and insurance schemes through partnerships with financial-services providers has positively changed the way businesses operate speeding up key elements of regional integration,” Dr. George Njenga, Dean Strathmore Business School, noted.

Fred Kwezira, a clearing agent in Gikondo, said the initiative will boost cross-border trade and enhance business competitiveness.

"It’s something that we have been calling for; therefore, its launch is a huge relief, not only for business community, but also the region as a whole,” he said.

Bharti Airtel is Africa’s leading telecommunications service provider with operations in 20 countries across Asia and Africa.

Tigo pioneered the cross-border mobile money transfer when it launched the service between Rwanda and Tanzania early this year. MTN Rwanda has also announced intentions to start cross-border mobile money transfer services next month.