Ethiopia’s second-biggest private commercial bank has launched a Sharia-compliant digital financial service through a modified version of Dube Ale, a buy now, pay later scheme kicked off last year. Dashen’s acting president, Tibebu Solomon, announced the new products developed in cooperation with Eaglelion System Technology at its headquarters in Addis Ababa’s financial district late Friday afternoon.
While full-fledged interest-free banking got the regulatory green light in late 2019 after being limited to a window service for seven years by the central bank, its digital financial innovation has been quite limited.
Dashen’s new product, dubbed Dube Ale-IFB, allows for several interest-free services and short-term financing in collaboration with merchants and traders, enabling customers to make purchases and pay later over a period of three, six, or twelve months without interest and profit markup as applicable. The maximum spending limit for DubeAle-IFB is set at birr 700,000, with payments made exclusively through the application.
Bersufikad Getache, CEO of Eaglelion, revealed that the Dube Ale conventional service has reached above 430K users, while the interest-free service has already gained over 44K registrations and signed up 17,000 merchants.
“Only sharia-compliant products are allowed in the new service,” he noted.
EagleLion has become an active player in Ethiopia’s digital ecosystem in the past few years, unveiling a cascade of products, including an updated remittance platform, just the past week.
Dube Ale has facilitated more than 792 million birr in transactions during its one year of operations. Meanwhile, Dashen, which received approval for a formidable $40 million transaction guarantee facility from the African Development Bank (AfDB), has been leveraging several partnerships to cement a stronger foothold in Ethiopia’s banking sector.
Ethiopia’s current financial ecosystem hosts four full-fledged interest-free banks, while almost all the other 26 banks offer window services. Hello Cash by Shabelle Bank and Sahay by Rays Microfinance Institution are some of the existing Sharia-compliant digital financial products in Ethiopia.
The financial sector, with assets of a little over 3 trillion birr at the end of June 2023, has massively adopted digital products in the past few years. Just last year, the number of mobile banking accounts grew by 67.5 percent to reach 27.3 million as the digitization push by the National Bank of Ethiopia (NBE) picked up steam. NBE’s three-year strategic plan aims to increase the volume of digital transactions fourfold, from 1.5 billion in 2023 to six billion by 2026.
Follow us
