Barriers and Benefits of Electronic Banking System in Ethiopia

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Addis Ababa University


This thesis aims to examine implementation of E-banking in Ethiopian banking industry with respect to the barriers which can influence firms from taking advantage of E-banking system and expected benefits derived by adopting the system. The study was conducted based on the data gathered from seventeen banks in Ethiopia; sixteen private banks and one state owned bank. Descriptive research approach was used to answer the research questions that emerge through the review of existing literature and responses from participants through questionnaire. The study statistically analyzes data obtained from the survey questionnaire. A research framework is developed based on technology-organization-environment (TOE) framework to guide the study. The result of the study indicated that, the major barriers Ethiopian banking industry faces in the implementation of E-banking are technology infrastructure being not easily available and low level of telecommunication network, lack of participation of employees in the implementation process, lack of training, absence of management support, lack of government support and absence of legal framework. The study also revealed direct and indirect benefits from E-banking implementation which are low cost in performing transaction, high speed and efficiency in service delivery, increased productivity and profitability of banks and improvement in customer service. The study suggests a series of measures which could be taken by the banking industry and by government to address various challenges identified in the thesis. These measures include: government support in providing technology infrastructure for ICT development and setting the necessary legal framework, banks to modernize their service by mobilizing all their resources through participating their staffs and providing trainings, and banks to create awareness to customers on how to make use of E-banking products and the benefits that will come out of it.



Benefits of Electronic