Only 34.8% of the 64.54Mn Ethiopian Adult Population are Banked, and an Even Smaller Percentage Use Any Type of Digital Financial Service (DFS).

Addis Ababa, Ethiopia (30 April 2022)

A report published by Solomon Kassa on a segment called ‘Tech Talk with Solomon’ discussed the infancy of the Digital Financial System in Ethiopia with figures drawn from International Telecommunication Union (ITU), Ethio Telecom, United Nations, World Bank, GSMA Intelligence, and KEPIOS.

The infographics displayed that 65.2% of the adult national population were underserved in the financial services sector, leaving over 40 million people utterly unbanked. The percentage of those who use banks and have credit and debit cards are 0.3% and 4.3%, respectively, which may be surprising when observing that mobile money users have reached 26% despite internet penetration in the country standing at 25% in 2019 according to World Bank.

More advanced digital financial services have even fewer user-percentage.  The number of online banking users has remained at 0.4% in the past year, while those who made digital payments, purchased goods online, or used the internet to pay bills in the same period are shown to be 11.9%, 0.03%, and 0.6%, respectively.

All this indicates the DFS in Ethiopia has low penetration still and is left wanting many improvements. The underlying problems mentioned in this report include a lack of adequate education, income, employment, and infrastructure; a lack of enabling laws and regulatory environment for digitization of payments and remittances; and restrictions on foreign investment in banking and financial institutions (including DFS providers).


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