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Financial Inclusion in Ethiopia

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  • Andualem Ufo Baza
  • K. Sambasiva Rao

Abstract

This paper analyzes the demand and supply side data to show the status of financial inclusion in Ethiopia. Using a set of survey instruments on demand side and data on supply side of financial inclusion, we first analyzed the demand side survey on account, saving, credit, payment, insurance and financial resilience as well as barriers to financial inclusion. Then, we determined and analyzed the supply side of the financial inclusion such as trends in the number of deposit accounts and loan accounts, branch per capita, branch density, ATMs per capita and ATMs density and the retail payment instruments penetration. The analysis of supply side study covered the data for the period from 2006 to 2015. We find that in Ethiopia 33.86 percent of adults has an account at formal financial institution in the year 2016. They use their account to keep money safe, send and receive payments, and to get credit services and foreign exchange services. Using the data on the supply side of financial inclusion in Ethiopia as of December 2015, we find that the branch per capita and branch density of 5.54 and 3.09 respectively. We find that barriers to financial inclusion such as lack of money, distance, fixed cost, and documentations are important obstacles in Ethiopia.

Suggested Citation

  • Andualem Ufo Baza & K. Sambasiva Rao, 2017. "Financial Inclusion in Ethiopia," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(4), pages 191-201, April.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:4:p:191-201
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    References listed on IDEAS

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    1. Ashraf, Nava & Karlan, Dean & Yin, Wesley, 2010. "Female Empowerment: Impact of a Commitment Savings Product in the Philippines," World Development, Elsevier, vol. 38(3), pages 333-344, March.
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    Cited by:

    1. Betgilu Oshora & Goshu Desalegn & Eva Gorgenyi-Hegyes & Maria Fekete-Farkas & Zoltan Zeman, 2021. "Determinants of Financial Inclusion in Small and Medium Enterprises: Evidence from Ethiopia," JRFM, MDPI, vol. 14(7), pages 1-19, June.
    2. Lahrour Khalid, 2023. "Public Policies for Financial Inclusion in Latin America and Asia: What Lessons for Developing Countries? [Politiques publiques en matière d'inclusion financière en Amérique latine et en Asie : que," Post-Print hal-04014943, HAL.
    3. Tekeste Berhanu Lakew & Hossein Azadi, 2020. "Financial Inclusion in Ethiopia: Is It on the Right Track?," IJFS, MDPI, vol. 8(2), pages 1-13, May.
    4. Beza Muche Teka & Simon Nahusenay & Taddess Asmare, 2020. "Determinants of Financial Inclusion in East Gojjam, Ethiopia," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(4), pages 1-4.
    5. Muhammad Khafid & Tusyanah Tusyanah & Tejo Suryanto, 2019. "Analyzing the Determinants of Financial Distress in Indonesian Mining Companies," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 353-368.

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    More about this item

    Keywords

    financial inclusion in Ethiopia; demand side; supply side; Ethiopia;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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