Ethiopia is one of the African country’s that has celebrated so much, the fact that their economy is growing at a fast rate with a population of 90 million, the country will have gone far if they would have backed down on their financial regulation. To date very few citizens of the country have bank accounts as the banking service is very limited.
However Visa inc. is looking to change the situation in the country and introduce the first debit card. The company is still piloting the possibility of convincing the government to loosen strict restrictions on banks in an effort to boost the use of electronic payments.
Looking at how the electronic banking has changed most African countries; it has attracted international trade as well as improved economic growth however in Ethiopia, Foreign banks are not allowed to operate and the government claims it needs to protect domestic lenders as its reason for the bar.
Jabu Basopo, Visa’s manager for Southern and East Africa, said his company is focusing on persuading leaders of Ethiopia the advantages of electronic payments. He added that the country looks like it is ready to try the new venture.
Users of Visa’s international card, which is being piloted by government officials, will be restricted to spending an amount that has been pre-loaded on the card. Visa said the government was pleased with the trial so far.
Basopo said local banks lacked muscle to push the central bank to drive change in an industry where the largest commercial lender is run by the state and holds two-thirds of all deposits.
Retail transactions in Ethiopia are primarily made in cash. Retailers say a scarcity of debit cards hinders growth in the retail sector, which is also off-limits to foreign chains.