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Ethiopia, Africa's second most populous country and one of its fastest growing economies, is pushing a new electronic payment service by phone - called M-Birr, or "mobile-money" - in a bid to bring millions into the banking system and financial services/FILE

Kenya

Ethiopia banks on mobile money for financial growth

– Stability –

That’s key for the country’s economy, for the banking system is as yet hugely underdeveloped.

Less than a fifth of Ethiopians had a bank account in 2014, against three-quarters in neighbouring Kenya, according to the World Bank.

But Ethiopia is experiencing strong economic growth, estimated by the IMF and the World Bank at nearly 10 percent annually over the past decade.

Since the overthrow of a Marxist junta in 1991, Ethiopia’s political and economic situation has stabilised, although rights groups have criticised the government for suppressing opposition.

The economy is still heavily dependent on agriculture, especially coffee, with the vast majority of the country’s workers involved in the sector.

But the government has set a target of increasing the number of bank account holders to 80 percent by 2020 and to double the number of bank branches in the country.

Officials look south to Kenya for an example of the potential – the mobile money system there has nearly 18 million users.

But the development of the banking sector still faces challenges within Ethiopia’s tightly controlled economy.

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“Ethiopia is a highly regulated country. The two most controlled sectors are telecommunications and financial services, exactly the two sectors we touch,” said Artaud. “It’s very sensitive.”

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