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Mobile Banking in Ethiopia

Image: iStock. Woman uses phone near Lalibela

The young, the educated and the better-off have been early adopters of mobile money technology. Mobile banking and mobile payment systems have been rapidly developing in sub-Saharan African (SSA) countries. In Ethiopia, only about 5.2% of the adult population uses mobile money. The first mobile money service in Ethiopia, M-BIRR, launched commercially in 2015.

This study, titled, M-BIRR: Mobile banking in Ethiopia looks at a mobile money service that is reaching a large number of beneficiaries, including  poor and underserved population groups. The study finds that mobile money use is widespread, and that there is an enormous market opportunity for further expansion of mobile money use despite lack of awareness among potential customers. Making a mobile money payment option available for utility bills could increase consumer welfare: consumers are willing to pay significantly more than the cost of providing the service for the convenience. This is particularly true in secondary cities, without one-stop payment centers, and among the better-off, the educated and those with experience using technology. However, a number of institutional factors, on both the supply and demand sides, would need to be tackled to make it possible for M-BIRR or others to provide this service.

The study was part of a joint program run by the European Investment Bank and the Global Development Network, initiated in 2016, that deployed African researchers to assess the development impacts of the EIB’s work in African and Caribbean countries, allowing the bank to enhance its contribution to sustainable and inclusive development while simultaneously enhancing local research and evaluative capacity.

Name of the Asset | The impact of private sector projects in Africa Studies from the EIB-GDN Program (Study from Cycle I: M-BIRR: Mobile banking in Ethiopia) 

Type of Asset | Paper in the Volume: The impact of private sector projects in Africa: Studies from the EIB-GDN Program (Cycle 1).

Date | 2019

Author | Yesuf Awel and Eleni Yitbarek

Country and/or Region | Africa, The Caribbean and The Pacific (ACP) countries

Name of the Program | EIB-GDN Program in Applied Development Finance

Download the Full Report | Cycle I