3.2 Million Microfinance Borrowers to Receive Digital IDs

Local business outsourcing and software company, Africom Technologies, is working to register 3.2 million microfinance institution (MFI) borrowers for the Fayda Digital ID. The project, funded by the World Bank and implemented by the National Bank of Ethiopia (NBE) and Ethiopian Enterprise Development, aims to increase access to finance and services for small and medium enterprises (SMEs).

Kicking off the project in January of this year, Africom secured the contract after winning a bid for ‘National ID Enrollment Campaign for Microfinance Borrowers.‘

“We have already onboarded 7,000 borrowers and are working with 34 microfinance institutions, including the six recently transformed MFIs such as Tseday Bank, Sinqee Bank, Sidama Bank, and Shebele Bank,” stated Baheru Zeynu, CEO of Africom Technologies.

The campaign, running until June 2025, is a part of the Small and Medium Enterprises Finance Project (SMEFP), which aims to enhance access to finance and bolster the capabilities of SMEs.

According to Yemenzwork Girefie, Project Coordinator at SMEFP, the project encompasses four key components: financial services to SMEs, creating an enabling environment for SME Finance, business development services, and project management, communication, and impact evaluation.

However, the project coordinator has declined to disclose the amount of funding allocated to the microfinance borrowers’ digital ID enrollment campaign.

Established in 2004, Africom offers services in various domains, including MIS consultancy, software development, Business Process Outsourcing (BPO), single-window projects, IT auditing, and e-commerce.

The recent Financial Stability Report by the NBE indicates that Ethiopia is home to 47 microfinance institutions, collectively operating 1,109 branches. As of June 2023, the total number of borrowers in Ethiopia stood at 4.4 million, with the majority of these borrowers being clients of MFIs.

The report further highlights that the total loan portfolio of MFI borrowers reached 39.1 billion birr in June 2023, marking a significant increase from the 15.6 billion birr recorded in 2019. Borrowers engaged in trade constitute the largest sector (14%), followed by agriculture (7%) and services (5%).

Last week, the Ethiopian Bankers Association (EBA) financed 6,000 kits with a cost of one billion birr to accelerate the Fayda registration process.

The distribution of the kits to kick off in September is determined by each institution’s financial contribution and overall capacity. The Commercial Bank of Ethiopia will receive the most kits (2,000 out of 6,000) due to its larger financial commitment.

Ethio Telecom is also participating in the national digital ID campaign and is using its network of service centers and partners nationwide to drive up registration. The state-owned telco plans to issue one million digital IDs monthly and aims to onboard 32 million of the 90 million targets the country intends to meet by 2028.

“Ethio Telecom has already initiated Fayda registration with a limited number of kits it has and plans to deploy 1200 kits, expanding its registration locations from 29 to 900,” stated Abenezer Feleke, Strategic Communications Advisor for National Digital ID.

Fayda is also collaborating with various government organizations for registration, including the Ministry of Revenue, the Ministry of Trade & Regional Integration, and the Documents Registration & Authentication Office. Unlike financial institutions and the state-owned telecom, the National ID Project Office will fund the kits for these organizations.

To date, the project office has distributed 500 kits and is preparing to distribute 9000 more.

Launched in 2022, the national ID program aims to register 90 million individuals for Fayda Digital ID. Equipped with 350 million dollars from the World Bank, it has registered 4.6 million people so far.