The Benefits of Digital Finance, Enabling Policy and Infrastructure That Enhances Digital Finance Inclusion of Selected Financial Institutions in Ethiopia

Abstract

Ethiopia is listed almost the last in financial inclusion in which many financially excluded individuals reside in that resulted financial discrimination, financial illiteracy and ultimately in financial exploitation with lack of access to health, education, and welfare services. Therefore, this study aimed at examining the benefits of digital finance, enabling policy and infrastructure that enhances digital finance inclusion of selected financial institutions in Ethiopia. The study employed a descriptive research design. The target population was digital finance service providers. The Panel Data obtained from bank, and primary data by survey questioner distributed to purposively selected managers and interview were used, and analyzed using descriptive analysis. The result indicate that innovative ways of service delivery provide convenient, appropriate, timely accessible, usable, affordable and pervasive nature for the services of the financial institution that can give potential to bridge the physical distance to reach out unbaked one. It helps in reducing poverty levels to the desired minimum and, it brings other socio-economic benefits, it has also benefits for the poor with the possibility to have better financial access and usage and provide opportunities to build saving and access credit that enables the poor to overcome unforeseen emergencies. Hence, it is indicated that digital channel has brought the potential to expand the outreach of financial institution services through forced usage for utility fee payment, social welfare benefits payment, inter and inter financial institution transaction, mobile money top-up payments such as M-birr, hello cash,  CBE-Birr, Amole , e-birr, HIBER used at the banks with MFIS and agents will increase the level of access and usage of financial services by un-banked and banked that leads to increased financial inclusion. Based on the findings from the study the gov’t has to work on assessing and reviewing policy and legal framework and infrastructure, create enabling environment, convenient to commence digital finance tool, and has backed with enabling policy, directives and efficient, accessible, usable and quality financial infrastructure that can help to achieve national financial inclusion goal through digital financial inclusion.