One evening, I stood in front of an ATM, needing cash for an urgent expense. I requested 4,000 birr, and the machine promptly deducted that amount along with a 16-birr service charge from my account. But then, unexpectedly, it dispensed nothing. Instead of cash, I received only a notification confirming the fee had been taken. After calling the bank’s customer service, I was assured that the amount would be refunded. Two days later, the 4,000 birr reappeared in my account. However, the 16 birr remained unresolved. “We will look into it,” they told me. That was weeks ago, and I am still waiting.
This small personal ordeal reflects a much larger issue within Ethiopia’s financial landscape. The government has been vigorously promoting digital payments as the future—a means to bring more people into the formal economy, reduce inequality, and modernize our financial systems. The vision is compelling: a cashless society where transactions are seamless, accessible to all, and free from the inefficiencies of paper money. Yet, for many ordinary Ethiopians, this digital transition feels less like progress and more like a new form of financial exclusion disguised as technological advancement.
Consider something as basic as accessing your own money. If you walk into a bank branch and fill out a withdrawal slip by hand, you can take out cash without incurring any fees. However, if you use that same bank’s ATM—the supposedly more convenient digital option—you suddenly face a charge, typically 3 to 6 birr per 1,000 birr transaction. While this may seem minimal, it creates a two-tier system where those who can afford to bank in person receive free service, while those relying on digital channels must pay for the privilege.
Often overlooked in this digital transition are the fundamental economics at play. When banks expand their physical branches into unbanked areas, they incur significant costs: renting premises, staffing, maintaining security, and managing the administrative overhead of brick-and-mortar operations. Yet, when customers opt for digital channels that save banks these substantial expenses, they are not rewarded with lower fees or improved service. Instead, they face a barrage of charges that can make digital transactions more costly than traditional banking. This perverse incentive structure reveals a troubling truth: what is marketed as financial inclusion through digital means often functions as a profit center disguised as progress. Banks enjoy cost savings while passing none of those benefits to the customers who make digital banking viable. The very people adopting digital banking find themselves shouldering fees that seem designed to extract value rather than create it.
The contradictions become evident when examining mobile money transfers. Initially celebrated as a low-cost solution for sending money over distances, these services have gradually become more expensive, with fees that erode people’s hard-earned cash. The most painful irony lies in small loans, where some digital lenders charge interest rates exceeding 20% per month—making them pricier than the informal lenders they were meant to replace.
What is particularly troubling is that these costs disproportionately impact those who can least afford them: small business owners making multiple daily transactions, domestic workers sending money home to their villages, and students trying to stretch a modest allowance. For them, these digital fees represent a significant burden, quietly depleting their limited resources under the guise of financial inclusion.
The issues extend beyond just fees. There are the frustrating experiences of failed transactions, where money disappears from accounts but never reaches its intended destination. The opaque customer service channels leave users waiting endlessly for resolutions, and there is often a lack of clear recourse when problems arise. Each of these failures undermines trust in the very systems designed to empower people financially.
These challenges raise uncomfortable questions about who our digital finance revolution truly serves. If the costs of going digital outweigh the benefits for ordinary people, can we genuinely consider this progress? When informal systems provide better terms than regulated digital alternatives, what does that say about our implementation?
Moving forward requires honest reflection from all stakeholders. Financial institutions must recognize that true inclusion means affordability, not just accessibility. Regulators need to ensure that consumer protections keep pace with technological advancements. Most importantly, the voices of ordinary users—their experiences, struggles, and needs—must inform how these systems evolve.
As for me, I have reconciled with my missing 16 birr, but I can’t help but wonder how many similar stories go untold across Ethiopia every day. How many people quietly endure these small digital indignities because they have no alternative? Our digital finance future holds tremendous promise, but only if we have the courage to acknowledge its shortcomings and the determination to create solutions that genuinely serve all Ethiopians, not just those who can afford to pay for participation.
The true test of our digital transformation will not lie in the sophistication of our technology, but in whether it improves financial life—not complicates it—for the market woman, taxi driver, farmer, and student. Until then, we are left with systems that appear modern but, in many ways, feel like a step backward.
At its core, true financial inclusion should uplift individuals rather than exclude them. It should focus on reaching the small shopkeeper in Addis Alem, the farmer in Wolaita, and the young entrepreneur in Adama—not through predatory fees and exploitative interest rates, but by providing empowering tools. When digital banking becomes merely another means to exploit those who are already struggling—when small and medium-sized enterprises are overwhelmed by unaffordable loan terms, or when a mother sending money to her child loses part of it to hidden charges—we have completely missed the mark. Financial inclusion was never intended to be a rebranded form of exclusion, where the disadvantaged are welcomed into the system only to be quietly robbed. It was meant to be a bridge built on fairness, not fees; on access, not exploitation. For Ethiopia’s digital finance revolution to have real significance, it must serve the people it claims to include, not the profits it discreetly protects. Otherwise, we will have merely replaced one form of marginalization with another—this time, adorned with a QR code.
Befikadu Eba is the founder and managing director of Erudite Africa Investments, a former banker with a strong interest in private sector development and financial inclusion. He can be reached at befikadu.eba@eruditeafrica.com.
