As part of the modernization of electronic payment infrastructure in Ethiopia, the Board of Directors of the African Development Bank (AfDB) supported a grant of 2.US$33 million from the African Digital Financial Inclusion Facility Special Fund (ADFI). A decision taken at a meeting in Abidjan on 17 December 2020. These financial resources are intended to finance the Ethiopia National Switch Enhancement Project.
According to the AfDB, this project will be a major support to low-income populations and will open up many financial opportunities for women. During its implementation, the switch will consistently support digital social payments, one of the priorities of the Ethiopian government especially in this context of global health crisis. The switch will facilitate bulk payments such as pensions, safety net program payments, e-commerce payments, bus tickets, utility bills (water, electricity and telephone) and traffic tickets. The project will not be limited to this, it will integrate the capacity development of the Ethiopian Treasury teams, the National Bank of Ethiopia and relevant entities such as the Ministry of Technology.
The national switch, the Ethiopian company EthSwitch S.C (abbreviation for “Ethiopian National Switch”), will be responsible for the execution of the project, which will be based in the first year on 17 banks and 2 micro-finance institutions (MFIs). In the second year, the number of banks will increase to 29 and the MFIs to 5. Finally, in the third year, two other banks and six other MFIs will be added to the project.
All banks in Ethiopia are shareholders of EthSwitch S.C, legally established in 2011 by the National Bank of Ethiopia and operational since 2016. It is the owner and operator of Ethiopia’s national retail electronic payment switch. The company’s job is to provide simple, affordable, secure and efficient electronic payment infrastructure services to payment service providers in Ethiopia with state-of-the-art technology and skilled and dynamic staff.