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Economy

High Digital Transaction Costs and Fraud Gaps Threaten Ethiopia’s Financial Inclusion Goals

The Reporter · 4 hours ago · Read the Full Story on The Reporter
High Digital Transaction Costs and Fraud Gaps Threaten Ethiopia’s Financial Inclusion Goals
AI SUMMARY

High transaction fees, undisclosed charges, and digital fraud risks are threatening Ethiopia's progress toward universal financial inclusion under the National Financial Inclusion Strategy.

  • Commercial banks in Ethiopia charge up to 11 percent for outward electronic transfers to mobile wallets.
  • Additional clearing fees, value-added tax, and a five percent disaster risk levy further inflate end-user transaction costs.
  • Auditors noted a 60 percent implementation deficit in digital fraud countermeasures alongside weaknesses in the legal framework governing electronic transaction liability.
  • The National Bank of Ethiopia processed roughly eight billion digital transactions worth over 34 trillion birr during the 2025/26 fiscal year.
  • Total mobile money accounts reached 157.6 million by June 2026, but only 29.56 percent of those accounts were classified as active.
  • Nearly two-thirds of the country's 23,226 point-of-sale terminals remained concentrated in Addis Ababa by 2025.
  • About 92.7 percent of mobile banking users and 74.9 percent of mobile money users still had to physically visit a bank branch or agent for onboarding.
  • Adult account ownership reached 66 percent in 2025, falling four percentage points short of the 70 percent goal.
  • The gender gap in account ownership stood at 15 percent against a target reduction to 10 percent.
  • Private credit allocations to micro, small, and medium enterprises reached 8.6 percent versus a 10 percent target, while agriculture credit stood at 10.5 percent against a 15 percent goal.
  • Insurance penetration lagged at 1.31 policies per 100 adults compared to a planned 3.9 policies.
  • The follow-up NFIS III (2026–2030) framework will prioritize marginalized groups and finance initiatives through a new National Financial Inclusion Fund.
Read the Full Story on The Reporter
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