According to
The World Bank Group
Global Findex data
, Ethiopia falls behind other countries in its region and globally on several key financial inclusion metrics:
- Only 35% of adults in Ethiopia have a bank account, compared to 43% in Sub-Saharan Africa and 69% globally.
- There's a significant 9 percentage point gap in account ownership between men and women in Ethiopia.
- Only 26% of adults in Ethiopia made or received digital payments in the past year, compared to 44% in Sub-Saharan Africa and 57% globally.
- Just 22% of adults in Ethiopia were able to come up with emergency funds, compared to 44% in Sub-Saharan Africa and 71% globally.
- Women
are less likely than men to save for specific purposes like farming/business or old age.
- Older age and higher income are associated with a greater likelihood of saving, while being female, older, educated, and poor reduces the likelihood of taking out loans for farm/business purposes. Wealthier individuals are more likely to borrow for assets like homes and land.
Challenges and the Pathforward
- Affordability: Financial products and services may not be affordable for low-income populations.
- accessibility: Physical access to financial institutions, particularly in rural areas, might be limited.
- Lack of Documentation: Individuals without proper identification might face difficulties accessing financial services.
- Low Financial Literacy: Limited knowledge and understanding of financial products and services can be a barrier.
- Digital Skills Gap: Lack of digital skills can hinder access to digital financial services.
Proposed Possible Solutions
- Development of Affordable and Innovative Products: Design financial products and services tailored to the needs of low-income populations, leveraging technology to reduce costs and increase accessibility.
- Expansion of Financial Service Reach: Increase access to both physical banks and digital financial service options. Promote awareness campaigns to encourage the public to adopt digital banking alongside conventional banking methods.
- Increasing the access of Identity cards to solve the documentation related problems. For example, Increasing and expanding the National ID program initiative
to ensure all citizens obtain identification Cards.
- Increasing Multi-Stakeholder Collaboration: Foster collaboration between development partners, private companies, and the government to build financial awareness at the grassroots level.
- Expanding Digital Literacy Programs: Implement nationwide digital literacy initiatives to equip individuals with the skills necessary to utilize digital financial services effectively.
Ahun is committed to empowering Ethiopian citizens with access to financial services and inclusion within the formal financial system. We recognize that digital financial services hold immense potential to bridge financial inclusion. Fostering awareness and empowering society plays a significant role.
Technology is the key ! But, Technology itself cannot solve the problem if the population lacks the knowledge and confidence to utilize it effectively. Customized and continuous support programs are crucial to equip Ethiopians with the necessary skills.
We believe that financial inclusion is not just a statistic, it's about unlocking opportunities. Imagine a farmer in rural Ethiopia who can access a microloan to purchase better seeds and fertilizers, or a small business owner who can utilize digital payments to streamline operations and reach new customers.
Ahun extends a hand for collaboration to work together to tackle financial exclusion and empower Ethiopians towards a financially inclusive future.
Let’s create a more equitable financial landscape for all !
