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Ethiopia's Digital Finance Sector: Overcoming Challenges and Driving Financial Inclusion

A team of researchers from the Policy Studies Institute and the Ethiopian Civil Service University conducted an internal validation workshop entitled "Digital Finance in Ethiopia: Interbank Competition, Financial Inclusion, and Constraints" on February 2, 2024 at the PSI premises.

 

The researchers, Dr. Tewolde Girma and Mr. Dayebo Gurbi from the Policy Studies Institute (PSI) and Dr. Tesfaye Chofana, Dr. Dessalegn Shamebo and Dr. Degele Ergano from the Ethiopian Civil Service University conducted a study on digital finance in Ethiopia. The focus of their research was on competition among banks, financial inclusion and the barriers that exist in the adoption and expansion of digital financial services in Ethiopia.

Dr. Tewolde Girma, PSI Lead Researcher (Photo from PSI Archive)

The aim of the study was to examine the level of competition among banks in the digital financial sector in Ethiopia. It also examined the impact of digital financial services on financial inclusion, particularly in terms of expanding access to financial services for underserved populations.

In addition, the researchers identified and analyzed the barriers and challenges that exist in the adoption and expansion of digital financial services in Ethiopia. This included examining infrastructure issues such as power outages and internet connectivity, as well as digital identification, cybersecurity and customer protection issues.

The first presenter of the study, Dr. Desalegne of the Ethiopian Civil  Service University, presented the research findings titled "Digital Finance and Interbank Competition in Ethiopia". Dr. Desalegne explained that technology plays a crucial role in driving economic growth, and digital technology in particular has transformed the operations of financial institutions since the 1970s. The digitalization of banking operations has led to increased efficiency and profitability for financial institutions. It has significantly reduced operational costs and increased return on equity. Moreover, digital technology has revolutionized customer communication, facilitated the provision of new financial services, and lowered barriers to entry in the financial services market.

Dr. Desalegne stated that the impact of digitalization on the financial services industry has created a competitive landscape and affected the market structure. It has triggered mergers and acquisitions, leading to a decline in the number of banks in certain countries. Additionally, new players specializing in financial technology have entered the market, intensifying competition. As a result, banks are expected to become more agile and competent to cope with this fierce competition. The effect of digitalization on competition is a subject of ongoing debate. Some argue that it leads to disruptive competition, resulting in efficiency gains. Others contend that it enhances the competitiveness of large banks due to their initial investment and market share, potentially leading to excessive risk-taking.

Dr. Desalegne underscored that in Ethiopia, the majority of economic transactions are still cash-based. Recognizing the need for digital financial services, the government ratified the National Financial Inclusion Strategy (NFIS) in 2016 and the National Digital Payment Strategy (NDPS) in 2020, allowing non-banking industries to provide financial services. However, the penetration of digital financial services remains low in the country. For example, in 2019/20, only 15.8% of the adult population had a mobile money account.

Several factors contribute to the low adoption of digital financial services in Ethiopia. These include limited and unreliable access to electricity, low levels of internet connectivity, low ownership of mobile handsets, low digital literacy, and limited competition. However, there have been recent improvements in these areas. Notably, no financial institution has experienced bankruptcy or closure under the existing regulatory framework.

Dr. Desalegne described  that as part of ongoing reforms, the Ethiopian government passed a bill in September 2022 to open the financial industry to foreign participation. This move aims to enhance competition, encourage innovation, and mobilize additional resources. The opening of the industry to foreign banks will expose domestic operators to intensified competition. Conducting research on interbank competition is valuable for enhancing digital readiness, enabling domestic banks to effectively compete with foreign banks and promote financial inclusion.

While existing studies have primarily focused on competition between traditional banking and non-banking entities (such as fintechs and bigtechs), there is currently no research on interbank competition in Ethiopia. Investigating interbank competition will provide insights into optimizing digital readiness, facilitating healthy competition, and promoting financial inclusion in the country.

Dr. Desalegne mentioned that that the methodology used in the study follows a general approach. The primary data source for the study was secondary data obtained from the National Bank of Ethiopia (NBE) and commercial banks for a period of 10 years, from 2013 to 2022. These data sources provided the necessary information to analyze the digital competitiveness of banks in Ethiopia.

To complement the quantitative data, Key Informant Interviews (KII) were conducted. These interviews allowed for gathering additional insights and perspectives from key stakeholders in the industry, providing a more comprehensive understanding of the digital landscape in Ethiopian banks.

Data analysis in the study involved the use of descriptive statistics and graphs. Descriptive statistics allowed for summarizing and presenting the quantitative data in a meaningful way. Graphs were used to visually represent the findings, facilitating a better understanding of patterns and trends.

To assess the digital competitiveness of banks in Ethiopia, the study utilized the ratio of digital transactions to the total assets of banks. This ratio served as an indicator of how well banks in Ethiopia were embracing digital technologies and integrating them into their operations.

In addition, the study measured the level of competition in Digital Payment Systems (DPSs) by using the ratio of subscribers to a specific service offered by a particular bank, relative to the total number of subscribers in the market. This ratio provided insights into the market share of each bank in the digital payment sector, reflecting the level of competition among them.

By employing this general approach and analyzing the available data, the study aimed to evaluate the digital competitiveness of banks in Ethiopia and the level of competition in DPSs. The findings from this analysis would contribute to understanding the current state of digitalization in the Ethiopian banking sector and inform strategies to enhance competitiveness and promote further digitalization in the industry.

The results of the study indicate that the banking sector in Ethiopia is composed of two public banks and 28 private commercial banks. These banks collectively account for approximately 92% of the total assets in the sector, amounting to 2.4 trillion Ethiopian Birr (ETB) according to data from the National Bank of Ethiopia (NBE) in 2023.

As of June 2022, the Commercial Bank of Ethiopia (CBE) held a dominant position in terms of deposits, with a 63.2% market share, and in terms of assets, with a 55.8% market share. This dominance is expected to persist due to factors such as CBE's large customer base and government support for services like utility payment, government employee salaries, and housing saving schemes. This implies an uneven playing field for other banks in the sector.

The study found that Ethiopia lags behind many other African countries in terms of digital payment competitiveness. The most commonly used method to measure digital payment competitiveness is the penetration of digital payment methods, which refers to the percentage of digital transactions. In Ethiopia, the percentage of digital transactions to GDP was about 7.4% in 2019, while in Kenya, it was 43.4% in 2020. This indicates a significant gap between the two countries.

The study also revealed that Ethiopia has a low number of ATMs, with only 5.29 ATMs per 100,000 people in 2021, compared to the Sub-Saharan Africa average of 6.94. Furthermore, in Kenya, mobile money transactions reached US$109.9 billion in 2022, while in Ethiopia, it was only 470 million. Similarly, the amount of agent transactions in Kenya reached USD 14.8 billion in 2020, while in Ethiopia, it was about 445 million. The percentage of agent outlets in Ethiopia was about 25% compared to Kenya.

The low level of digital payment competitiveness in Ethiopia can be attributed to several factors, including limited access to mobile and internet services, lack of infrastructure to support digital payments, low levels of digital literacy, and a limited number of digital payment providers.

The study suggests using various methods to measure the trend of Digital Payment Systems (DPS) and competition among banks, including the volume and value of digital payments, customer adoption rate of payment services (subscribers), availability of digital payment methods, and price.

These findings highlight the challenges faced by the Ethiopian banking sector in terms of digital payment competitiveness and indicate areas that need to be addressed to promote digitalization and enhance competition in the industry.

Based on the findings of the study, it can be concluded that digital payment services in Ethiopia are experiencing significant growth. The value, volume, number of subscribers, and transactions per subscriber are all increasing, with transactions reaching 1.6 trillion birr in 2022. However, despite this growth, the share of total assets transacted digitally remains relatively low compared to Kenya.

The dominance of the Commercial Bank of Ethiopia (CBE) in providing digital payment services is notable due to its economies of scale, large customer base, and extensive branch network. However, its market share is declining as a result of interoperability measures and the adoption of new technologies.

To further enhance digital payment services and promote competition in the sector, several recommendations can be made. Firstly, promoting interoperability among digital payment systems will allow emerging banks to share infrastructure with incumbent banks, fostering innovation and competition. Secondly, investing in digital infrastructure, such as high-speed internet connectivity, mobile networks, and power, particularly in remote areas, will support the growth of digital payment services and enhance competition.

Additionally, reducing regulatory burdens on new entrants, promoting mergers and acquisitions, and encouraging the entry of foreign banks into the sector will foster beneficial competition while effectively managing risks. Promoting the use of digital payment services among underbanked and underserved populations will contribute to financial inclusion and expand the customer base for digital payment providers.

Finally Dr. Desalegne underscored  that enhancing digital literacy and increasing awareness about the benefits of digital payment services among the general population will build trust and confidence, leading to greater adoption and competition in the sector.

 

              Dr. Dessalegn Shamebo

The second presenter Dr. Tefaye presented the research finding on the title “Financial inclusion in Ethiopia: Comparative analysis”. Dr.Tesfaye said  financial inclusion (FI) is a crucial aspect of economic development and has numerous benefits for individuals, communities, and the overall economy. The importance of FI can be understood by examining its various dimensions.

First, FI plays a vital role in promoting safe savings. Access to formal financial services allows individuals to securely save their money, protecting it from theft or loss. This is particularly important for vulnerable populations who may not have access to secure storage options. By providing a safe place to save money, FI enables individuals to accumulate wealth and plan for the future.

Second, FI facilitates deposit mobilization and contributes to financial stability. When a larger portion of the population has access to formal banking services, there is a greater pool of funds available for lending and investment. This can stimulate economic growth, support entrepreneurship, and create employment opportunities. Additionally, a more inclusive financial system reduces the likelihood of bank runs and financial crises, promoting overall stability in the financial sector.

Furthermore, FI has a positive impact on inclusive growth, poverty reduction, and income equality. Studies have shown that when individuals and businesses have access to financial services, they can invest in education, healthcare, and business expansion. This leads to increased productivity, income generation, and poverty alleviation. Moreover, FI can help reduce income disparities by providing equal opportunities for all segments of society to participate in the formal economy.

 Dr. Tesfaye Chofana

In particular, FI has been recognized as critical for women's empowerment and entrepreneurship. Access to financial services enables women to start and expand their businesses, enhancing their economic independence and contributing to overall gender equality. It also enables women to save and invest in education and healthcare for themselves and their families, breaking the cycle of poverty.

Dr.Tesfaye explained that financial exclusion, on the other hand, has adverse effects on individuals and communities. When people are excluded from formal financial services, they are forced to rely on personal wealth or informal sources of credit for education, healthcare, and business investments. This perpetuates poverty and limits economic opportunities for marginalized groups. Additionally, financial market imperfections, such as limited access to credit or insurance, reinforce exclusion and hinder economic development.

However, advancements in information and communication technology (ICT), artificial intelligence (AI), and digital tools have the potential to address financial market imperfections and enhance FI. Digital financial services (DFSs) have emerged as powerful tools to extend financial services to underserved populations. They offer convenient and cost-effective alternatives to traditional banking services, allowing individuals to access savings accounts, make payments, and access credit through their mobile phones or other digital devices.

Dr.Tesfaye stated that despite efforts by the government and development partners to promote FI in Ethiopia, the country still faces challenges in achieving widespread financial inclusion. There is a significant gender gap and an urban-rural divide in accessing financial services, with vulnerable social groups such as youth, women, the poor, and small businesses being more excluded. Additionally, low levels of financial literacy and limited adoption of financial technologies hinder FI in Ethiopia.

Dr.Tesfaye mentioned  that to address these challenges and bridge the knowledge gap, the main objective of the study is to examine the factors influencing FI in Ethiopia. The study will also conduct a cross-country comparison of FI to gain insights from other contexts and identify best practices. Furthermore, the study aims to highlight the role of digital financial services in promoting FI, considering the potential of ICT, AI, and digital tools to overcome financial market imperfections and enhance access to financial services for all segments of the population.

Several factors have been identified as influential in financial inclusion (FI) in Ethiopia, based on empirical studies. These factors highlight the disparities and barriers that exist in accessing formal financial services within the country.

Gender is a significant factor affecting FI in Ethiopia. Studies have shown that being a woman reduces the probability of having a formal financial account by 20.6% and saving by 30.4%. This gender gap indicates that women face additional challenges in accessing and utilizing financial services, emphasizing the need to address gender inequalities in FI.

Age also plays a role in determining access to formal financial services. Middle-aged individuals in Ethiopia are more likely to be financially included compared to younger or older individuals. This suggests that age can impact the opportunities for inclusion, with middle-aged individuals having better access to formal financial services.

         Dr. Degele Ergano

Dr.Tesfaye elaborated that that Education is another important factor influencing FI in Ethiopia. Individuals with a secondary education have a 65% higher probability of owning a formal financial account and a 47% higher probability of saving compared to those with a primary education or less. Education enables individuals to understand and utilize financial services effectively, highlighting the importance of financial literacy and promoting education for improved FI.

Participation in the labor force (LF) is associated with a higher probability of having a financial account and saving. Individuals who are employed or engaged in income-generating activities have better access to financial services, indicating the role of employment and income generation in promoting financial inclusion.

Income levels also have a significant impact on FI. The highest income quintiles in Ethiopia have the highest probability of owning a formal financial account and saving. Higher income levels provide individuals with more resources to access and utilize financial services effectively, underscoring the importance of addressing income disparities to enhance FI.

The ownership of mobile phones has emerged as a powerful tool for financial inclusion in Ethiopia. Mobile ownership increases the probability of holding a formal financial account by 65% and saving by 47%. Given the limited physical banking infrastructure in the country, mobile technology presents an opportunity to bridge the gap in financial access and provide convenient access to a range of financial services.

Dr.Tesfaye underscored that the factors influencing financial inclusion in Ethiopia align with findings from studies conducted in various countries, indicating common patterns across different contexts. To promote financial inclusion, it is crucial to address these factors comprehensively. Gender equality should be promoted to ensure that women have equal access to and utilization of financial services. Enhancing financial literacy and promoting education, particularly at the secondary level, can empower individuals to make informed financial decisions and effectively utilize formal financial services. Generating employment opportunities and promoting labor force participation can contribute to greater financial inclusion by providing individuals with stable incomes and improved access to financial services. Policies and programs aimed at poverty reduction and income generation can help increase the financial inclusion of marginalized groups by providing them with the resources to access and utilize financial services. Furthermore, expanding mobile ownership and improving digital infrastructure can play a significant role in bridging the financial inclusion gap, as mobile phones offer a convenient means of accessing a range of financial services. By addressing these factors, Ethiopia can work towards achieving greater financial inclusion and unlocking the economic potential of its population.

Although Ethiopia lags behind some benchmarked economies in terms of financial inclusion, it demonstrates a higher probability of savings and borrowing. To catch up with these benchmarked economies, Ethiopia can focus on boosting income levels, reducing the gender gap, generating employment opportunities, and increasing mobile ownership. By addressing these factors, Ethiopia can enhance financial inclusion and promote inclusive economic growth.

The impact of secondary education on the probability of having a financial account is highest in Nigeria, followed by Ethiopia. This suggests that secondary education plays a significant role in improving access to formal financial services in these countries.

Participation in the labor force has the highest effect on the probability of having a financial account in Kenya, followed by Brazil, China, and Ethiopia. This indicates that employment and income generation contribute significantly to financial inclusion in these countries.

Gender differences in the probability of having a financial account are generally absent in most countries, although there is slight variation in Ethiopia. However, notable gender disparities in financial inclusion are observed in China and Nigeria.

Overall, cross-country analysis suggests that Ethiopia has the potential to reduce disparities in financial account ownership and improve financial inclusion.

Digital financial services (DFS), such as mobile banking, internet banking, ATMs, agency banking, and POS devices, are playing a significant role in enhancing financial inclusion in Ethiopia by reaching underserved populations.

There is a positive correlation between DFS access indicators and financial inclusion in Ethiopia. Except for ATMs, the indicators of financial inclusion demonstrate a strong and positive correlation with the volume/value of transactions conducted through DFS.

However, there are challenges that need to be addressed to further enhance financial inclusion through DFS in Ethiopia. These challenges include limited access to DFS in rural regions, restricted network coverage and power access, and the need for financial literacy to effectively utilize digital financial services.

Socioeconomic variables are found to be increasing financial inclusion in Ethiopia, but being a woman decreases financial inclusion. Therefore, targeted interventions are required to enhance women's inclusion in formal financial services.

Mobile ownership has been identified as a promoter of financial inclusion in Ethiopia. It aligns with the results of the multiple countries analysis of financial inclusion, suggesting that mobile phones are powerful tools for expanding access to financial services across different contexts.

When compared to benchmarked economies, Ethiopia has a lower probability of owning a financial account. However, Ethiopia shows a higher probability of saving and borrowing than most of the benchmarked countries. This indicates that while there is room for improvement in financial account ownership, Ethiopia has made progress in savings and borrowing.

By leveraging digital financial services, addressing the challenges, promoting gender equality, and focusing on increasing financial account ownership, Ethiopia has the potential to catch up with benchmarked economies and further enhance financial inclusion.

Introducing initiatives catering to women's financial needs is crucial for promoting gender equality in financial inclusion. This can be achieved by implementing programs that specifically target women and address the barriers they face in accessing formal financial services. These initiatives should focus on promoting women's access to education and economic opportunities, as these factors have been shown to bridge gender disparities in financial inclusion.

Deepening economic growth is another important aspect of promoting financial inclusion. By implementing policies and programs that foster economic development, such as creating employment opportunities and supporting small businesses, more individuals, including women, can participate in the formal financial system.

Integrating financial literacy education into curriculums is an effective way to enhance individuals' understanding of financial concepts and promote responsible financial behavior. By incorporating financial literacy into school curriculums, young people can develop the necessary skills and knowledge to make informed financial decisions.

Launching financial literacy programs through community-based education, mobile apps, and various media platforms can reach a wider audience and provide accessible information on financial management. By utilizing these platforms, individuals, including women, can access financial education resources tailored to their needs and preferences.

Expanding mobile banking and agent banking services can significantly improve financial inclusion, particularly for underserved populations. By increasing the reach of mobile banking services and establishing agent banking networks in rural and remote areas, individuals who lack access to traditional banking infrastructure can benefit from convenient and affordable financial services.

Encouraging mobile ownership among individuals, including women, can be done by subsidizing smartphone prices and internet services. Lowering the cost of mobile devices and internet connectivity can make them more accessible, enabling individuals to utilize mobile banking and other digital financial services.

Importing workable lessons of financial inclusion from other countries can provide valuable insights and strategies for improving financial inclusion in Ethiopia. By studying successful initiatives and adapting them to the local context, Ethiopia can benefit from the experiences of other countries and accelerate its efforts towards greater financial inclusion.

Overall, Dr.Tesfaye stressed that by implementing these initiatives and addressing the specific needs of women, Ethiopia can promote gender equality in financial inclusion, enhance financial literacy, expand access to mobile banking services, and learn from successful initiatives implemented in other countries. These efforts will contribute to a more inclusive financial system and support sustainable economic growth in Ethiopia.

The third presenter Dr. Degele Ergano , presented the research findings on the title “Analysis of Binding Constraints in Digital Financial Service in Ethiopia”. Dr. Degele said the objective of the study was to investigate the adoption status of digital payment technology in Ethiopia. To achieve this, a survey was conducted in 2023 using multistage sampling techniques, targeting many  bank workers,  individual bank users, and experts from the National Bank of Ethiopia (NBE). The sample was selected from five different cities, namely Addis Ababa, Jimma, Bahir Dar, Hawassa, and Jigjiga, with the aim of maintaining regional balance and capturing the dynamics of digital payment.

The study identified several constraints within the digital payment system. These constraints were ranked according to their importance using a decision tree framework and descriptive statistics. Through this analysis, the researchers gained valuable insights into the challenges faced by stakeholders. The identified constraints could include issues such as infrastructure limitations, regulatory barriers, security concerns, and a lack of digital literacy. Understanding these constraints is crucial in formulating effective policies to overcome them.

Furthermore, the study explored the perception of different stakeholders regarding the relevance and significance of each constraint. By surveying bank workers, individual bank users, and NBE experts, the researchers gained valuable insights into the varying perspectives and priorities of these stakeholders. This information is essential for policymakers and industry players to understand the specific concerns and needs of different stakeholders and develop targeted strategies to address them.

Dr. Degele mentioned that in addition to identifying constraints and understanding stakeholder perceptions, the study also aimed to determine the determinants of digital payment technology adoption. Through the use of a multivariate probit analysis, the researchers examined the factors that influence the adoption of digital payment technologies among consumers. This analysis helps to uncover the drivers and barriers that affect the adoption process, providing valuable insights for policymakers and industry players to design interventions that promote wider adoption

Based on the analysis of the survey data, several patterns and findings emerged regarding the importance and adoption of different digital payment platforms across cities in Ethiopia. One notable pattern is the order of importance across cities for ATM, mobile banking/wallet, internet banking, and agent banking. The study found that ATM services were considered the most important digital payment platform across all cities, followed by mobile banking/wallet and internet banking. Agent banking, which is crucial for expanding cash-in and cash-out services for mobile banking, was identified as having limited coverage and requiring intervention.

Furthermore, the study revealed that while commercial banks are still expanding their conventional bank branches, selected places like Jigjiga showed unusual statistics concerning mobile banking/wallets. Despite being far from the city center, Jigjiga exhibited higher adoption rates for mobile banking/wallet services compared to other cities. This finding highlights the importance of understanding the specific dynamics and factors driving adoption in different regions.

In terms of overall improvement in access and usage of digital payment systems, the study compared the findings to a 2017 report by the World Development Indicators and noted a significant improvement. However, the gender gap still persists, although there has been some improvement for ATM and mobile banking. Additionally, the study found an improvement in urban setup, with the percentage of urban residents adopting digital payment systems decreasing from 12% in 2017 to 10% in the current study.

The study also observed differences in technology adoption among customers of different types of banks. Customers of commercial banks, which have limited branch coverage, tend to rely more on ATMs since their branches are not available on every corner. On the other hand, customers of specialized banks like Zemen and Hejira were found to be more open to internet and mobile banking activities. These banks properly track their customer subscriptions for mobile and internet banking services.

Among specific banks, Nib Bank had the largest number of ATM adopters, Hijira Bank had the highest adoption rates for mobile banking and mobile wallets, and Zemen Bank had the highest adoption rates for internet banking.

The study also found that the younger age group tends to be more open to technology adoption and usage. Additionally, the likelihood of adopting digital payment services varies across geographical residence, with cities in eastern Ethiopia surprisingly showing a higher likelihood of accepting mobile banking and mobile wallet services.

Furthermore, the relative importance of determinants for technology adoption varies across different types of digital payment platforms. Factors such as level of education and income were found to be significant in the decision to adopt digital finance technologies.

Last, the study highlighted significant variances in technology adoption based on gender, which were depicted in a graph. This finding emphasizes the need to address gender-related barriers and promote gender-inclusive strategies for digital payment technology adoption.

Dr. Degele stated that the analysis of the survey data provides valuable insights into the patterns and determinants of digital payment technology adoption in Ethiopia. The findings suggest the need for interventions to address limitations in agent banking coverage, promote gender inclusion, and tailor strategies to different regions and customer segments.

In conclusion, based on the analysis and findings, it is recommended that the Ethiopian government takes a leading role in developing the digital payment ecosystem. This involves creating a favorable regulatory environment and providing support for payment infrastructure and interoperability. It is important to ensure a level playing field by allowing private banks equal access to offer digital payment services alongside state-owned banks to encourage innovation and competition. Digitizing government-to-private and private-to-government payments should be prioritized to promote the use of digital payment systems for tax payments, utility bills, and other government services. Introducing unified payment systems, such as a common mobile payment app or payment gateway, can simplify transactions and enhance the user experience. To address limited agent banking coverage, establishing extensive agent networks is crucial to facilitate cash-in and cash-out services, particularly in remote areas. Proactive and unified fintech regulations should be developed and implemented to provide clarity, guidance, and consumer protection. Incorporating financial literacy education into the curriculum at different educational levels can improve digital payment literacy and awareness. Encouraging joint investments among commercial banks in shared infrastructure like ATM cards and POS machines can create a robust digital payment platform, reducing duplication and enhancing interoperability. Additionally, developing a single jointly shared internet banking app based on each bank's assets can simplify user experience and promote financial literacy. By implementing these policy recommendations, Ethiopia can foster the development of an inclusive and efficient digital payment ecosystem that promotes financial inclusion, efficiency, and economic growth.

Following the presentation, participants at the validation workshop raised many questions about the research findings, such as the opportunities and threats of foreign banks entering the market, the risks of the digital financial system, trust in digital payments, the differences between private and state-owned banks, the reasons for country selection, financial fraud related to the digital financial system and why some cities in Ethiopia such as Jigjiga perform better than others in the digital financial system, the digital financial system and rural Ethiopia.

In conclusion, H.E. Prof. Beyene Petros, Director General of PSI, thanked the researchers for their valuable findings and commendable work. He emphasized the importance of presenting this research to a wider audience of stakeholders to ensure its wide dissemination and impact.

H.E. Prof. Beyene also highlighted the need to address the issue of limited access to banks' data. He recognized the importance of data in conducting comprehensive research and formulating evidence-based policies and advised researchers to look for solutions to overcome this data limitation.

H.E. Prof. Beyene further elaborated on the high use of digital finance in Jigjiga and pointed out that the presence of a large Somali diaspora in Western countries contributes to this trend. These people bring knowledge and experience of digital financial systems from the western world. He found it remarkable that even in pastoralist areas known for their traditional livelihoods, digital financial systems are highly adopted. This observation highlights the potential for technology adoption and financial inclusion in unexpected contexts.

Furthermore, Prof. Beyene Petros encouraged the researchers to work closely with the banks. He reminded them that PSI has already signed a Memorandum of Understanding (MOU) with Oromia Cooperative Bank and emphasized the importance of cultivating strong partnerships with financial institutions to drive the implementation of research findings and promote the development of digital financial services.

Overall, Prof. Beyene Petros acknowledged the importance of research, gave valuable advice and emphasized the importance of collaboration, data access and stakeholder engagement to achieve the goals of financial inclusion and digital transformation in Ethiopia.

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