Why Ethiopian Financial Services Industry Is Slow on Mobile Banking
Thursday, April 16, 2015
Ethiopia’s heavily regulated financial service sector is one of the least developed on sub-Saharan Africa with over 80 million people from a population of 94 million still unbanked, despite the rapid economic growth the horn of Africa nation has experienced over the last decade.
Mobile money innovations that have revolutionized financial inclusion in neighboring Kenya, Uganda, Tanzania and Rwanda have not taken hold in Ethiopia as the telecommunication services sector remains closely held by a government reluctant to allow private investors in.
As a nation, Ethiopia’s 7 percent average annual economic growth has been one of the best in the region over the decade as it recovered from poor governance by earlier regimes and chronic droughts that devastated most of the country’s farming regions.
“The economy is growing and people need to transact money fast,” Dawit Nehemia, technical, marketing and research director at SS Communications, told HowWeMadeItInAfrica.com.
Only recently have regulators and banks become a bit more receptive to the introduction of mobile financial services, opening opportunities for businesses like SS Communications. There is still a lot to be done given that mobile money has barely started, inter-bank transactions are non-existent and only a few people have debit cards.