Effect of Digital Banking Solutions on Financial Inclusion in Ethiopia: The Case of Amhara Bank
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Date
2026-07
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Addis Abeba Universty
Abstract
Financial inclusion remains a significant challenge in Ethiopia, particularly in rural and underserved areas lacking formal banking infrastructure. This study investigated the effect of digital banking solutions on financial inclusion at Amhara Bank, focusing on four services: agent banking, mobile money transfer, mobile account management, and mobile bill payment (Aba QR). A quantitative research approach with descriptive and explanatory designs was employed. Primary data was collected from 400 customers using structured questionnaires, achieving a 93.4% response rate. Data was analyzed using descriptive statistics, correlation analysis, and multiple regression analysis.
The findings revealed that all four digital banking solutions had statistically significant positive effects on financial inclusion. Agent banking had the strongest influence (β = 0.380, p < 0.001), followed by mobile money transfer (β = 0.340, p < 0.001), mobile bill payment (β = 0.160, p<0.001), and mobile account management (β = 0.140, p = 0.001). The model explained 66.0% of the variance in financial inclusion (R² = 0.660). Mobile money transfer showed the strongest correlation with financial inclusion (r = 0.680). Customers valued speed, convenience, and security of mobile transfers, but affordability (mean = 3.18) and merchant acceptance for QR payments (mean = 2.98) remained concerns. Agent banking had high potential but low usage (mean = 2.55) and accessibility (mean = 2.82). Mobile account management received the highest satisfaction (mean = 4.09).
The study concludes that digital banking solutions effectively expand financial inclusion in Ethiopia. Recommendations include expanding agent banking networks, reducing transaction costs, increasing merchant QR acceptance, and improving mobile app usability. Policymakers should incentivize rural agent banking, review mobile transaction taxes, and support interoperability through EthSwitch.
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Digital banking, financial inclusion, agent banking, mobile money transfer, mobile account management, mobile bill payment, Aba QR, Amhara Bank, Ethiopia