For decades, banking in Ethiopia meant distance between a farmer and the nearest branch or between a trader and a loan officer. Today, that gap is closing not with new buildings, but with keystrokes on a mobile phone. A quiet revolution is reshaping how millions of Ethiopians save, borrow, pay and trade.
There are numbers that tell an incredible story. Launched in May 2021, the telebirr, Ethio Telecom’s mobile money platform, went from zero to becoming a popular financial utility in just five years. As of early 2026, telebirr had amassed a little under 59 million users and made a total of 6.8 trillion Birr worth of transactions – with 1.9 trillion Birr transferred in the previous six months alone.
Ethio Telecom has amassed over 87 million subscribers to its service, making it an unrivalled financial player in the country of 125 million people. Beyond just being a platform for money transfer, telebirr, by collaborating with banks and microfinance institutions, has linked more than 16 million customers to the credit services of the latter and managed to mobilize more than 34 billion Birr worth of digital savings. Currently, telebirr operates a network of over 300,000 merchants and agents and has started disbursing billions of Birr worth of micro-loans to first-time borrowers, most of whom had never had a credit score until a few months ago.
Another mobile money service that has made itself at home in Ethiopia is M-Pesa, provided by Safaricom company. Having integrated its service into the national payment system – EthSwitch, M-Pesa managed to grow its active user base into millions. By the end of 2025, there were 5.2 million active M-Pesa users, proving that the mobile money market in Ethiopia has become competitive rather than experimental.
From Cash Economy to Digital Ledger
The wider picture of financial inclusion shows some tangible progress despite significant unevenness. According to World Bank’s Global Findex Database, the share of mobile money users among Ethiopian adults increased from meager 4.7 percent in 2021 to 19.4 percent by 2024 – a quadrupling in just three years. As for the supply-side data, National Bank of Ethiopia reports an increase in the number of digital financial accounts from 94.7 million in June 2022 to 222.1 million by March 2025.
And for a typical trader, this process has several tangible advantages. First of all, a vegetable vendor in Merkato does not have to walk back home with the daily earnings through busy streets. Secondly, a minibus driver now has access to the system that allows him or her to collect payments electronically and create the transaction history which will be used eventually as a basis for the first ever loan taken by this trader. Lastly, a relative working in another country can now send the money home instantly without the risks involved in informal transfers.
The Gap That Remains
Yet, constructive analysis must not shy away from mentioning unaccomplished goals. The overall number of adults who own either traditional banking or mobile money accounts was 49% of Ethiopians in the latest Global Findex survey, growing only modestly from 46% in 2021. It is an alarming figure if one takes into account the impressive growth in volume of mobile money transactions. Opening millions of accounts is not sufficient to achieve universal financial inclusion because many accounts still remain unused after being used for the payment of some governmental service or registration bonus program.
There are three gaps that particularly require further actions of the policy makers, banks, and telecom companies:
First, the gender gap. According to the Findex data, 57% of adult males in Ethiopia own a formal financial account against only 42% of adult females – thus, the gender gap ranges between 15 and 18 percentage points. To solve the problem of the gender gap, it is important to consider more than technologies but rather to design an agent network with women in mind, conduct targeted financial literacy programs, and develop products suitable for female entrepreneurs and traders.
Second, the rural and literacy gap. According to the recent study of Ethiopian researchers based on Findex data, internet usage and educational level are the strongest predictors of account ownership while urban residents are almost two times more likely to own such an account than rural people. When the infrastructure is rapidly developing – for instance, the proportion of areas with 4G internet coverage increased from 37.5% to 70.8% in a fiscal year – it is necessary to make sure that this coverage turns into expanded usage.
The trust and security gap. With rapid digitization come new forms of crime, ranging from SIM swap scams to social engineering targeting customers and employees of banks alike. The National Bank of Ethiopia reports that most banks in the country faced attempted fraud during the previous reporting period. But this is not an excuse to slow down the process; quite the opposite—it means that now is the time for a rapid increase in the capacity of cyber security, consumer education, and fast-acting anti-fraud mechanisms to accompany it.
Building on Momentum
The strategy chosen by the country—integrating mobile banking inside the state telecom operator and linking it to national projects, such as Fayda digital ID and EthSwitch interoperability platform—has yielded such results that are rarely achieved even in African countries. Over 30 million Fayda digital IDs have been issued to date, and by 2028 the government plans to reach the mark of 90 million of such IDs. Tightening the link between such infrastructure and banking and mobile money registration would allow significantly to reduce the paperwork barrier that prevents many potential users from accessing services.
The challenge is not to make another revolution but to take the current one further: to expand the networks of agents to reach the final mile, to design the right savings and credit products for informal traders and smallholder farmers, to close the gender gap intentionally, and to keep up with the pace of digitalization in terms of consumer protection.
The mobile phone proved to be an efficient banker in Ethiopia—reaching those who cannot get to the physical branches of banks and other financial institutions. But the next step of this quiet revolution would not be about opening new accounts but about using them in a meaningful way by consumers.
The writer can be reached via moges4994@gmail.com
