As Ethiopia races toward its goal of 70% adult financial inclusion by 2025, mobile money is emerging as a transformative force for millions, especially in rural and underserved communities. Yet, despite rapid progress and government support, The Path to Mobile Money report by Shega states, significant barriers remain on the journey to a truly inclusive digital financial ecosystem,
According to the report, with a population of 126.5 million and one of the world’s fastest growth rates, Ethiopia is uniquely positioned for a digital finance revolution. The country’s demographic profile skews young, with a large share of digital natives ready to embrace new technologies. However, less than half of Ethiopians currently have access to formal banking services-a gap mobile money aims to close.
The rural-urban divide remains stark. While urban centers like Addis Ababa and Dire Dawa enjoy higher population densities and better infrastructure, vast rural areas face persistent challenges: limited financial infrastructure, patchy mobile network coverage, and low digital literacy. These factors have made it difficult to achieve widespread adoption of digital financial services (DFS), including mobile money, the report further states.
Mobile phone ownership is on the rise, but Ethiopia still lags behind regional peers such as Kenya and Nigeria. As of early 2024, there were 77 million mobile connections-about 60% of the population. However, the cost of smartphones remains a significant barrier, with prices averaging 77% of monthly income, compared to just 28% in Kenya.
Most Ethiopians still rely on basic or feature phones, accessing mobile money through USSD codes and SMS rather than app-based services. Internet penetration is improving, with about one-third of the population online, but rural connectivity and digital literacy remain hurdles.
The report further states that electricity access, crucial for charging devices and enabling digital services, has improved dramatically-rising from 29% in 2012 to 55% in 2022. Yet, a 51% gap persists between urban and rural access, further complicating efforts to expand mobile money in remote areas.
Ethiopia’s financial landscape has evolved rapidly over the past decade. Once dominated by cash and traditional banks, the sector now features a growing array of DFS, including mobile banking, card payments, and internet banking. Regulatory reforms, technological innovation, and a push for financial inclusion have paved the way for non-bank financial institutions and fintech startups to enter the market.
Mobile money, in particular, is seen as a game-changer for the unbanked. Users can deposit, transfer, and withdraw funds via mobile agents or linked bank accounts, and access services such as bill payments, microloans, and savings-all without needing a traditional bank account.
This report from Shega is part of the AKOFADA project aimed at bolstering the accessibility of information on Digital Financial Services in Ethiopia.
Shega is an information services and technology company that provides in-depth insights into Ethiopia’s economy through an integrated media, data, and intelligence solution.
