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On 27 April 2023, the United Nations Capital Development Fund (UNCDF), with the support of the Bill & Melinda Gates Foundation, launched the Cash-in/Cash-Out (CICO) project in Addis Ababa, Ethiopia. The launch brought together key stakeholders from Ethiopia's banking sector, MNOs, Fintechs, MFIs, development agencies and other digital financial services ecosystem players. High-level speakers from the National Bank of Ethiopia, the Bill & Melinda Gates Foundation, and the UN Resident Coordinator's office in Ethiopia joined the UNCDF Ethiopia Country Coordinator to express their commitment to the CICO project as a significant step to ensure financial inclusion for all Ethiopians.
Digital Finance Country Lead, Endashaw Tesfaye presents an overview of the project.
The CICO project aims to strengthen Cash-in/Cash-out (CICO) networks in Ethiopia. This will be done through ecosystem-wide boot camps, the improvement or launch of new technology solutions, and the development of a CICO measurement dashboard for industry players, including the regulatory body.
The project will contribute to efforts by the Ethiopian government to achieve 70% account ownership by 2025 as per its revised National Financial Inclusion Strategy 11. According to the World Bank’s 2022 Findex report account ownership in Ethiopia is currently at 46.5%, meaning that efforts at expanding the agent network need to be ramped up to achieve the government's 2025 target. Through this project, different ecosystem players will be empowered to generate meaningful insights and make evidence-based decisions to ensure the inclusion and participation of unserved and underserved constituents in the digital economy.
The project will run for two years and focus on activities such as CICO boot camps, a digital distributor incubator, and support to the central bank to expand an automated data collection system on CICO and financial services access points. About 15 service providers, including mobile money providers and their agents, retail banks, microfinance institutions, etc., will receive training in foundational and specialized digital money distribution courses through the boot camps.
Through the digital distributor incubator, CICO managers and technology firms will be able to develop and test the viability of their new technology ideas. Selected service providers (CICO providers and technology firms) with the most viable solutions will be awarded US$50,000 and will work with financial service providers to bring their solutions to market. Through this activity, more sustainable solutions can scale faster, offering better services, lower network costs, and limiting dormancy in agent networks.
Speaking at the launch event, Ariel Delaney, Ethiopia Program Officer, Financial Services for the Poor, Bill & Melinda Gates Foundation, said, "The Gates Foundation recognizes that UNCDF has a strong track record of supporting financial inclusion initiatives in Ethiopia and is well-positioned to implement this project effectively. By partnering with UNCDF, we hope to leverage our expertise and resources to make a meaningful impact in Ethiopia and help to build a more inclusive financial system in the country."
The CICO project aims to increase women's active participation in the digital economy. It will ensure the adequate representation of women by highlighting the case for sex-disaggregated data to the Central Bank and regulated entities and identify opportunities to disaggregate some data points by gender. The World Bank's Global Findex Database of 2021 indicates that only 29% of women in Ethiopia have an account compared to 41% of men, with the gap even wider in rural areas, where only around 15% of the population have an account.
Emphasizing the need for gender inclusion in the project, Abibatou Wane-Fall, Chief of Mission to Ethiopia, International Organization for Migration (IOM), who represented the UN Resident Coordinator, stressed that "we must take targeted action to address this issue and increase financial inclusion among marginalized communities in Ethiopia. This includes expanding access to financial services, promoting financial literacy, and addressing cultural and social barriers that prevent women and youth from accessing financial services."
The National Bank of Ethiopia's Acting Director of Payment Systems and Settlements Directorate, Solomon Damtew, said, "The National Bank of Ethiopia fully supports this project, and we are committed to working closely with UNCDF and the Gates Foundation to ensure its success. We hope this project will help us identify areas where we need to improve our policies and regulations further and support the growth of CICO networks sustainably and responsibly. This will not only benefit the financial sector but also contribute to the overall development of our country. I urge all stakeholders to support this project and work together to improve financial inclusion in Ethiopia."
During the panel session of the launch, panelists from the private and public financial services space agreed that Ethiopia had made significant progress in its agent network journey. However, they emphasized that access to financial services still needs to be improved, particularly in rural areas. They highlighted challenges like limited infrastructure, lack of awareness and trust in digital financial services, limited technical capacity, and inadequate regulatory frameworks. Also, the lack of coordination among stakeholders leads to fragmentation and inefficiencies in the system. They concluded that these challenges need to be addressed. Thus, improving the reach and quality of CICO networks is a critical step towards achieving financial inclusion for all Ethiopian citizens, particularly the underserved.
Endashaw Tesfaye, Digital Finance Country Lead and Ibrahim Mamma, Country Coordinator for UNCDF Ethiopia, both affirmed UNCDF's belief in the transformative power of digital technologies to improve access to financial services, create new business opportunities and enhance social inclusion, ensuring that no one is left behind in the digital era. Improving CICO networks in Ethiopia and enhancing data collection and analysis for the Central Bank, will ensure that underserved populations such as women, youth and rural dwellers in Ethiopia can also access and benefit from the digital economy.