In this interview, Kinfemichel Yibkaw, an expert on Ethiopia’s financial sector, discusses the importance of comprehensive data for modernizing financial service delivery in the country. He highlights the challenges Ethiopia faces in organizing and utilizing data effectively to improve banking, lending, and other vital financial services.
Kinfemichel emphasizes how access to accurate, focused data can provide crucial insights that enable financial institutions to better understand and serve their customers. He also addresses the barriers to digital transformation in Ethiopia’s financial system, including uneven technological capabilities across institutions and the need for collaborative approaches between banks and specialized technology providers.
Kinfemichel Yibkaw Abraha is a financial services and financial inclusion expert based in Ethiopia. For over seven years, Kinfe has been working in the development sector with local and international NGOs, including projects funded by USAID and DFID. He currently works to develop and assesses financial inclusion interventions. Kinfe has worked in the microfinance sector, supporting projects that support women’s financial inclusion and also supporting agriculture value chains.
Kinfe worked in banking for many years, doing domestic retail, trade service, corporate lending and credit banking. In this capacity, he developed a deep understanding of the regulatory environment.
Kinfe holds a Bachelors in Economics from Unity University College in Addis Ababa, and an MSC from the Maastricht Graduate School of Governance at the University of Maastricht. He also obtained diplomas in accounting from Addis Ababa University Commercial College and microfinance from Uganda Martyrs University in Kampala. Excerpts;

Capital: Comprehensive data is becoming increasingly important for the financial sector to modernize service delivery. What is the status of Ethiopia?

Kinfemichel Yibkaw: If we look at finance and other services, there are situations where data limitations as a country arise as a major problem. Data is generated in various forms on a daily basis because it is something that is generated on a daily basis. But the big question is how that information can be used for profit or for the benefit of others. It can be very difficult to quickly access information when the service is provided manually. This is one of the things that can make information useful. We can’t easily find the information in the manual. Therefore, capturing this information in a digitally relevant format is crucial. The other side of the equation is important. It gives us the opportunity to see, compare, and conduct in-depth research from many angles when the information comes from different sources and has different seas. The country faces this problem. There’s a lot of work to be done on organizing data.

Capital: What kind of information can be used for financial services?

Kinfemichel: Financial services are often referred to as well-known services, such as loans and savings. Not only do they have access to these common services, but they can also meet their needs by providing better services based on the day-to-day activities of the community. The financial system and the system must also come into this. There are other bank or microfinance users. What kind of services do you suggest? What is their response to the services? It gives them an opportunity to come up with a better service based on what they think needs to be improved, whether it’s their opinions about the service or the information they have with the bank.

Capital: What is the impact of unprecedented data on the financial sector in the industry?

Kinfemichel: All kinds of information on the financial sector should be made clear in such a way that it is accurate, not speculative. They need to focus on information that can’t be found anywhere else. There is a widespread trend of mis information, especially in the context of financial services. Data should be in the most focused form and give us insight that we can’t find. As a result, the decentralized information system of the industry can gradually have an impact on the industry.

Capital: How to adapt the country’s data and technology?

Kinfemichel: This process has been new to the institutions that provide services when we talk about digital financing 10 or more years ago. But now that they’re done with the new technology, it’s becoming more and more apparent that they’re doing it. He is now investing in technology as well as banking services. But what’s important is that we organize all the information we have in a way that we can use. It is often the case that the financial services are not connected to the financial institutions. The reason for this is that the system is very complicated and there is a service that does not like any risk and that the risk is fully covered by bonds, and the majority of the population is not able to provide a mortgage. But what is the role of each other in the development of the economy and what is happening in other countries as well as what is happening in the world? It’s important to get out of the usual way of collecting data using data in a variety of ways to determine what the ability to return when taking out a loan. There are starts, but it needs to be worked on.

Capital: What is the reason for the lack of access to digital banking services? What is the difference between the two systems?

Kinfemichel: When it comes to digital modernization, it requires a lot more than just investment. Various financial institutions have disproportionate capacity. In terms of access to adequate resources and investing in technology, especially small institutions, they may have difficulty with this. Beyond that, we need technology that understands this new modern system. There’s always a need for that technology to be combined with core business. There is a challenge here.
However, there is something to be said for the fact that when we get to the point where we have achieved both, and with the help of technology. In this case, cyber security as well as networking becomes an issue. At this time, service and technology are constantly updated, and that goes hand in hand with the changes that come and needs to be constantly improving things. I personally believe that banks invest in a variety of things, but the environment in which they invest is far from core business for the banks. There are other institutions that do this properly on a day-to-day basis. Therefore, it is difficult to work collaboratively in some areas, and it is difficult to re-establish all of them in one institution, so it is important to consider whether it is possible to collaborate and coordinate with different institutions.

Capital: Do you think it’s necessary to make the system mandatory in order to allow the end users of the service to enter the digital system?

Kinfemichel: Perhaps the angle determines that what we are doing is the process of streamlining the transaction process between the service provider and the merchant as well as the consumer. In countries such as Ethiopia, the majority of the population has little understanding of the services. In this case, it may be necessary for the community to make decisions that are sometimes necessary to make decisions about how to use the services. However, I agree that the way it is implemented should be studied. For example, there was a lot of confusion, confusion and confusion until it took its own time to get to the bottom of the problem. The more we study these things and apply them in a way that can be avoided better.
Sometimes, however, they can be compelling. However, we need to think about how we can reduce the abuse I mentioned above.