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TitleIdentifying Binding Constraints on Digital Payment Services in Ethiopia: An Application of a Decision Tree Framework
AuthorGetnet Alemu , Tadele Ferde and Alejandro Fiorito
SubjectDigital Governance, Africa, Sustainable Development Finance
Date of Publication2021
PublisherCenter for Global Development
AbstractWhile several comparable countries in sub-Saharan Africa have seen a significant increase in financial inclusion, mainly driven by digital financial services, Ethiopia still performs poorly. Even digital payment and transfer services, which lower-income and less literate segments of the population could benefit from, are rarely used. Given the low development level of Ethiopia, numerous supply and demand factors could explain this disappointing outcome. The authors use a decision tree framework to isolate and analyze potential constraints to find which are binding—that is, which constraints limit the expansion of digital payment services in Ethiopia. Our analysis indicates that supply-side problems are pervasive, and we find that competition problems in the essential digital infrastructure market and in the financial sector are responsible for the inadequate provision of digital payment services in Ethiopia.
Filesize1657119 MB
File FormatPDF
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