| Abstract: | Financial institution have been using several means in their desire to satisfy their needs in customer service and easier operational procedures. However digitalization of the same is a very recent phenomenon. As the financial institutions endeavor is to expand their customer base and provide the service to the unbanked society, a cost effective channel is required for them to have presence in most corners of the country. Mobile money service is currently being applied by most banks and microfinance’s in Ethiopia or they are at the study level. This study tried to explore challenges in the provision of mobile money service in five microfinance institutions that are delivering M-BIRR service. The M-BIRR (mobile money service) as a service which is provided through branches and business that act on behalf of the financial institutions called ‘agents’ is not provided or has not utilized its promised or target plan as mobile money service in reaching every corner of the country. The study used secondary and primary sources of data to reach at its conclusion. The primary data is collected through focus group discussions, data form key informants, structured questionnaire for customers, agents and branch staffs. The data is presented with frequencies and percentages of the respondents analyzed using SPSS 20. From the data collected it is realized that there are several challenges that are faced by the financial institutions themselves internally, from their customers and agents and the society in general. At the same time the level of awareness of consumers is found out to be very minimal or nonexistence in most cases. It is found out that awareness poses major challenge in the provision of the service. It’s the studies finding that internal technology adaptation behavior, business orientation of the MFIs, staff turnover, quality of training, customers/agents unwillingness to be associated with MFIs, low level of marketing and promotion activities and engagement, low level of communication and support of MFIs hierarchically, and poor customer service can be mentioned among others. The study finalizes that with a recommendation that FIs be engaged fully by dedicating a full time team that is responsible to overlook the MMS. At the same time trainings, marketing and promotion, development of trust by consumers, and policies that promote FIs institutions efforts and at the same time a policy that will allow FIs to accept supports from funding partners are recommended as activities to be considered in the provision of MMS in Ethiopia as MMS requires and consumes vast resources |
