THE CHALLENGES AND PROSPECTS OF MOBILE AND AGENT BANKING IN ETHIOPIA

Abstract

This research work aims to investigate the prospect and challenges of Mobile and Agent Banking in light of fostering financial inclusion in Ethiopia hoping that the finding of the research will add value to various stakeholders for decision making as well as serving as an impetus for further research work in the field. It is a descriptive research design employing the mixed research approach whereby both qualitative and quantitative type of data was collected to explore the research question. The research work was delimited to relevant institutions having direct role and supporting role to the subject matter. Questionnaires with close and open ended questions were distributed and interviews were conducted with employees of these institutions. Additionally, the researcher tried to review various empirical and theoretical literatures in light of having an in-depth understanding on the subject matter to supplement the research construct. The research found out that Mobile and Agent banking serves as a successful propagator of financial inclusion entailing an immense opportunities towards enhancing accessibility to financial services to the unbanked/under banked of the society and serving as an additional revenue generating mechanism, cost reduction and increasing customer base for financial institutions. The findings of the research revealed that major challenges facing up the successful implementation of Mobile and Agent banking in Ethiopia were the infrastructural problem associated with ICT and road network, lack of appropriate agent banking channels and low level of financial literacy in the Country. In order to overcome the challenges and harness the opportunities, looking for an alternative approach is paramount in lieu of the existing Bank-Led model adopted by the National Bank of Ethiopia. Therefore, based on the findings of the research, it was recommended that the Mixed Model serves as a way out for Ethiopia mainly attributed to its fundamental role to alleviate the major challenges.