Macro Financial Sector Assessment For Cash-Based Transfer Interventions In Ethiopia
No Thumbnail Available
Date
2018-11-08
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
Displacements due to conflict along the borders of the regions of Ethiopia together with recurring drought has left millions of the Ethiopian population requiring emergency food assistance. Ethiopia is also hosting hundreds of thousands of refugees from its neighbours. In collaboration with aid agencies, Ethiopia supports its vulnerable population in saving lives with food assistance to empower women, transform areas affected by natural and man-made disasters and keep children in school. Currently, Ethiopia is increasingly combining traditional food assistance with Cash-Based Transfer (CBT). In CBT intervention, the role of Financial Service Providers (FSP) is paramount to reach beneficiaries through cash benefit. Many research works were carried out on cash intervention programmes in Ethiopia. However, much focus has not been given to assess the extent to which the FSP in Ethiopia can support the cash benefit distribution. The financial sector in Ethiopia is emerging and developing in terms of service offer coverage, competition, and technological advancement. In this respect, the country and the humanitarian organizations engaged in CBT may face challenges if their CBT intervention doesn’t consider the context of Ethiopia’s FSP. The purpose of this Macro Financial Assessment (MaFA) is, therefore, to assess the country’s financial capacity to support cash based transfer programme in the country. The study adopted descriptive research type and involved collection of secondary data through guidance by the World Bank’s Financial Sector Assessment, the Bank of International Settlement, the International Monetary Fund (IMF) and the Global Partnership for Financial Inclusion (GPFI). The focus of the assessments are: Government Supervision, Ease of Entry, Competition, Consumer Protection, and Financial Inclusion. The assessment results showed that government supervision scored the highest; competition and consumer protection scored medium while ease of entry and financial inclusions resulted in low scoring. Overall, based on the information currently available and highlighted in this report, Ethiopia is given Medium score indicating the sector’s feasibility for CBI. Based on the present study, it is recommended that the CBI in the country need to start from small to medium scale with subsequent expansion to the large scale on gaining experience and lessons.
Description
Keywords
Macro Financial Sector Assessment, financial service providers