Ethiopia: Expanding Digital Financial System

Modernizing and equipping the nation's financial institutions with Digital Financial System (DFS) strengthens the country's move towards economic development and creates a fertile ground to harmonious and safety local and international money transfer transactions.

Presently, numerous daily indoor and outdoor activities are carried out with the help of technology-born devices or sometimes by the devices alone. The continual new technology innovations, particularly, the Information Communication Technology (ICT) has played a matchless role in satisfying human desire for swift information dissemination. However, unless countries are capable to cope up with the rapid modern technology innovation, they may lag behind in competitiveness or they could be sidelined from the development obit.

Yes, financial institutions are the channels, facilitators or backbones of a country's economic inducement. They are stake role players and financial circulation implementers. The profits of business tycoons or investment success stories are directly or indirectly linked with financial institutions involvement. They are the key engines in promoting socio-economic development. Apart from facilitating favourable conditions for loan, deposit, internal and global money transfer, they become a warrant for job creation opportunities.

Moreover, they provide services not only limited to short, medium and long-term loans for development projects, like for industrial and agricultural projects but also they offer the needy ones under specific and collateral conditions. Financial institutions also provide other services such bill of exchange and saving accounts. But, remote areas service accessibility and digital finical system expansion should be underscored.

Therefore, as they play a crucial role in the nation's economic transaction,like in facilitating various mega project investment financial resources, money transfers , providing loans to the micro and small enterprises, among other financial related issues, modernizing their quality service is timely and mandatory.

What is more, Digital Financial Services (DFS) can expand the delivery of basic financial services to the ordinary citizens through new technologies like mobile phones, electronic money and new channels such as retail agents. These channels can drastically slash down costs for customers and service providers. They can also open the door to remote and rural population in the usage of DFS. Global experiences have showcased the tremendous role of DFS that can play for financial inclusion too. Hence, creating enabling environments for DFS can boost the country's economic gains.

Hence, making these institutions' service provisions accessible and adopting the use of digital financial service system will enable the country to speeding up its economic development.

Indeed, the nation has untapped natural resources. But, some of its potential resources are not addressed by digital financial systems. Hence, apart from expanding, introducing digital financial system, booming inclusive financial service in remote areas of the country would foster the country's economic development. Because, digital banking services enables beneficiaries to access their bank accounts, make fund transfer payments and balance inquiries as well as get instant notifications on all their accounts.

Of course, presently, the financial sectors in Ethiopia are growing. The banking system, insurance, micro and other financial institutions have widened their service rendering horizons to the public and private sectors. Yet, there are still digital financial system utilization gaps, specially in remote areas of the country.

However, the government has been engaged in providing seed capital and technical support through inclusive finance programmes to ensure households and small business communities access to financial services and to expand digital financial system opportunities.

Furthermore, the nation has been engaged in expanding inclusive finance and digital financial services to enable access to a range of quality financial services across the country. Because quality inclusive and digital financial system provision enables to provide customer services with affordable price.