Enabling the digital-first economy through tailored solutions and ecosystem collaboration
Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Ethiopia’s economy. They drive job creation, innovation, and local economic growth. Yet despite their importance, many Ethiopian MSMEs remain excluded from the formal financial system, unable to access essential services such as credit, digital payments, and modern banking tools.
As Ethiopia’s payment landscape transforms under the country’s broader digital reforms, solving the financial inclusion gap for MSMEs is vital.
Addressing the ‘missing middle’
Access to finance remains a major hurdle. MSMEs in Ethiopia often fall into the ‘missing middle’ – too large for microfinance, too small or risky for traditional bank loans. Many are forced to rely on informal sources of credit like friends, family, or local lenders. With an estimated $550 billion MSME financing gap across Africa, Ethiopia’s small businesses urgently need alternative funding solutions. However, a digital revolution is within reach.
This surge in digital wallet adoption enables MSMEs to formalise operations, track transactions more accurately, improve cash flow, reduce reliance on cash, access new markets and build the financial history needed to access credit – unlocking a path toward long-term financial inclusion and resilience.
Driving digital financial inclusion through education and access
Despite the rise of mobile channels and fintech tools, many MSMEs lack awareness or understanding of digital financial services. From mobile money to online accounting, these technologies can reduce costs and improve efficiency, but digital literacy remains low. In fact, 85.3% of individuals in Ethiopia still lack access to a bank or mobile money account.
Bridging this divide requires more than just digital tools. It requires partnerships, education, and infrastructure. Programs that build awareness, upskill MSMEs, and expand access to Ethiopia’s payments ecosystem are necessary to ensure these businesses are not left behind.
Infrastructure and policy challenges
Infrastructure remains a challenge. Reliable electricity and internet access are still limited in many parts of the country. Without these, MSMEs cannot use even basic digital tools like POS machines, cloud accounting, or e-commerce platforms.
Additionally, Ethiopia’s complex regulatory environment can deter innovation. Start-ups and small businesses often lack the resources to navigate red tape, apply for licenses, or comply with ongoing financial laws. Streamlined, MSME-friendly policies are needed to unlock true participation in the digital-first economy.
To realise the full potential of payments in Ethiopia, the ecosystem must come together. Government, financial institutions, fintechs, and private sector players all have a role to play in removing barriers to inclusion. Solutions like digital onboarding, low-cost digital wallet tools, and merchant-level credit scoring can go a long way in making financial services more accessible to Ethiopia’s MSMEs.
At EFT Corporation, we have an in depth understanding of the nuanced challenges of MSMEs in emerging markets and provide proven digital payments infrastructure that supports financial inclusion at scale. As a trusted technology partner, we work with banks and fintechs to deliver secure, scalable platforms that meet the real-world needs of entrepreneurs.
As Ethiopia’s payments sector continues to develop under the Digital Ethiopia 2025 strategy, the opportunity to empower MSMEs is full of potential. With the right tools and support, MSMEs can thrive – contributing to Ethiopia’s digital transformation and building a more inclusive, resilient economy.
Interested in supporting Ethiopia’s MSMEs with inclusive digital financial solutions?
Connect with EFTCorp to enable secure, scalable, and localised payment infrastructure that empowers businesses and builds a more inclusive economy.
