Abstract
Agent banking is a cornerstone of Ethiopia’s financial inclusion strategy, yet its full potential remains untapped. This brief, based on a comprehensive scoping study by the Ethiopian Economics Association, identifies critical barriers and presents a strategic roadmap for regulators, financial service providers, and agents. The sector is characterised by explosive growth in digital payments but is constrained by severe operational inefficiencies, a restrictive regulatory environment, and significant geographic and gender disparities.
Key findings indicate that 66% of agents face chronic liquidity short-ages, 95% of agents are concentrated in urban areas, and female participation is only 30%. While transaction values have seen compound annual growth rates exceeding 200%, agent retention is low, and regulatory processes are perceived as slow and unclear. To harness this potential, this brief recommends:
For Regulators: Streamline and digitize approvals, promote interoperability, and establish a regulatory sandbox.
For Providers: Diversify agent networks, modernise liquidity management, and leverage data analytics.
For Agents: Adopt digital tools, formalize operations, and prioritize customer education. A coordinated, multi-stakeholder approach is essential to transform Ethiopia’s agent banking sector into a powerful engine for inclusive economic growth
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Authors
Dr Naser Yenus, Dr Molla Alemayehu