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Striving for financial inclusion entails more than just enrolling individuals in bank accounts or mobile wallets. It is equally crucial to guarantee the active utilization of these services, maintain high quality standards, and ensure a positive impact on individuals and households.


Ethiopia is undergoing a significant transformation towards financial inclusion. The growing presence of banks and microfinance institutions in the market, coupled with the entry of telecom operators and fintech startups, has profoundly reshaped the financial landscape. This transition holds the potential to drive financial inclusion and foster the adoption of digital finance alternatives.

Official figures confirm that market developments in recent years have expanded the reach of financial services and increased the number of individuals with bank accounts. As per the 2022 World Bank Findex report, based on formal account ownership metrics, Ethiopia has attained a 46% rate of financial inclusion.

Data sourced from the National Bank of Ethiopia (NBE) also reveals that the number of transaction accounts exceeded 150 million in 2022, with 60 million of these being mobile money accounts. In addition, the National Bank has committed to achieving a target of 70% of adults having bank accounts by the year 2025.

Another encouraging advancement in the Ethiopian financial landscape is the increasing number of financial service providers, surpassing 109 licensed financial institutions as of March 2023, and the opening of the sector both in policy and regulation aspects.

Although access to basic bank accounts has undoubtedly improved, it is important to acknowledge that nearly half of the population still lacks this privilege. Ethiopia’s financial inclusion rate of 46% falls short of the global average of 76% and the 71% rate observed among developing countries.

This lack of access disproportionately affects individuals in rural communities, low-income households, and those with limited literacy levels. Gender gaps in account ownership also persist, indicating the remaining work at hand in expanding access to these underserved segments of the population.

While there is no doubt that continued attention should be given to reaching the financially excluded, it’s essential to acknowledge that Ethiopia has now attained the minimum threshold for basic financial inclusion. Initially, a significant portion of efforts in Ethiopia concentrated on expanding access. However, there is an increasing recognition that subsequent usage, quality, impact, and overall financial well-being hold equal significance.

The time has come to pivot the focus away from mere access and shift it towards the deepening dimensions of financial inclusion. This involves emphasizing active usage, enhancing service quality, assessing impact, and ultimately improving the holistic financial well-being of customers. This shift recognizes that the impact of true financial inclusion goes beyond the mere availability of services, encompassing how individuals and communities utilize and derive benefits from these services to amplify their financial well-being.

Drawing from the success of Kenya’s financial inclusion journey, exemplified by the transformative mobile money platform M-Pesa, it becomes evident that while widespread adoption and access are vital, they alone do not ensure financial well-being. Even in countries with high levels of financial inclusion, there are concerns about financial well-being due to instances such as predatory lending practices, exorbitant fees, and a lack of adequate consumer protection measures. These concerns continue to undermine the ultimate goal of improving lives and contributing to inclusive economic growth.

The Financial Inclusion Journey

At its core, financial inclusion refers to the availability, accessibility, and usage of essential financial services for individuals and businesses, particularly those underserved or excluded from the formal financial system. These financial services include savings, credits, payments, insurance, and, most recently, investments.

There may be various methods to map the financial inclusion journey, but the following steps are typically recognized to understand the development within a specific market.

  1. Access: The first step towards financial inclusion is giving people access to transaction accounts and financial access points. This involves providing formal financial accounts like bank accounts or mobile money wallets and establishing physical bank branches, agent networks, connectivity infrastructure, and digital platforms to reach underserved populations.
  2. Usage: During the usage stage, it is essential to actively engage with financial services. Simply having access to these services does not guarantee positive outcomes, so promoting regular and meaningful interaction with financial tools is crucial. This can be achieved through initiatives that enhance financial literacy, digital skills, build trust, and provide user-friendly products and services.
  3. Quality: The third stage emphasizes the quality and suitability of financial products and services. This stage emphasizes delivering financial products and services that cater to diverse needs, including affordable credit, insurance, savings, and investment options. It involves enhancing customer experience and consumer protection and addressing transparency, fairness, and responsible lending.
  4. Impact: In the fourth stage, the journey focuses on the effects of financial inclusion on individuals, households, and communities. It goes beyond accessibility and usage and analyzes concrete results, including reducing poverty, enhancing economic empowerment, improving livelihoods, and contributing to social development.
  5. Financial Health: The ultimate goal of financial inclusion is to improve overall financial health. This holistic approach surpasses access and usage, promoting well-being, financial resilience, and the ability to achieve financial goals. It encompasses effective budgeting, saving habits, responsible borrowing, and the resilience and sustainability of the financial systems both at the individual and national levels.

Striving for financial inclusion is not just about registering more people to have bank accounts or mobile wallets. It is equally crucial to guarantee the active utilization of these services, maintain high quality standards, and ensure a positive impact on individuals and households.

This comprehensive perspective of financial inclusion encompasses both access to and the utilization of appropriate, affordable, and diverse financial services, extending beyond the confines of savings and payments alone.

Therefore, we must prioritize financial deepening as a critical factor in all policy, regulation, and service provision discussions and actions. This means having honest conversations that go beyond the number of accounts and transaction volumes. We need to delve into the type of service offered, usage patterns, and preferences. It also involves examining the ultimate impact of financial services at the individual, institutional, and national levels.

To achieve inclusive and meaningful growth, we must focus on more than just access to financial services. We should also prioritize the quality, impact, and overall financial well-being of individuals and communities. It’s crucial to remember that financial inclusion isn’t just a goal but is also used as a tool for opening up economic opportunity and accelerating growth.

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