The National Bank of Ethiopia (NBE) has launched a six-month remittance initiative, called the “DEBO” campaign, aimed at increasing foreign currency inflows by encouraging Ethiopians abroad to use formal banking channels for money transfers. The “DEBO” campaign comes at a time when the Ethiopian banking sector faces increasing competition from mobile money platforms like Telebirr, which have rapidly gained popularity for their ease of use and accessibility.

Under the “DEBO” campaign, Ethiopian banks will offer attractive exchange rates, allow the opening of foreign currency accounts, and introduce financial products tied to remittances, such as mortgage loans, vehicle loans, and small-to-medium enterprise (SME) loans. To support the initiative, banks have collectively allocated 100 billion ETB (Ethiopian birr) (USD 900M). The goal is to strengthen the country’s foreign exchange reserves and stimulate economic growth by boosting the volume of remittances sent through formal banking channels.

Currently, recipients of remittances in Ethiopia have a variety of options, including mobile money services, cash pickups through agents, and direct bank deposits. However, local banks are often perceived as inefficient, with only 19 commercial banks serving a population of over 115 million. As a result, mobile money platforms like Telebirr, which was launched by Ethio Telecom in 2021, have become a popular alternative for many Ethiopians due to their speed and convenience.

Telebirr allows both registered and unregistered users to send and receive international remittances through mobile numbers. The service, integrated with eight banks and supported by a wide network of agents across the country, enables money transfers from countries such as the United States, Canada, and Australia. Its rapid adoption has led some industry observers to question whether traditional banking channels can compete in the long term.

Remittances are a critical source of foreign exchange for Ethiopia, contributing around $5 billion annually to the economy. Recognizing the significance of these inflows, the NBE has been focused on reforming the country’s foreign exchange management system. The “DEBO” campaign forms a central part of this strategy, aiming to incentivize greater use of Ethiopian banking services while curbing reliance on informal and mobile money platforms for remittance transfers.

A key feature of the campaign is the introduction of Unite.et, a new platform developed by NBE. Unite.et enables Ethiopians abroad and foreign nationals of Ethiopian origin to open bank accounts virtually, streamlining the process for the diaspora to send funds home and participate in the country’s development. NBE Governor Mamo Mehretu emphasized that the campaign aligns with the bank’s broader efforts to modernize foreign exchange management and promote financial inclusion.

While mobile money services like Telebirr offer quick and convenient solutions, the formal banking sector provides additional advantages such as loans and savings products linked to remittances. NBE is betting that these services will attract more users to the formal financial system. However, Telebirr’s strong presence, particularly in rural areas where access to banks is limited, poses a challenge to the traditional banking model. The platform’s integration with banks has allowed it to serve users who seek both digital convenience and formal banking services.

Despite these challenges, the “DEBO” campaign represents a critical push by NBE to channel remittances through official financial institutions. Whether the campaign can successfully compete with mobile money platforms in the long term remains to be seen. However, with a combination of attractive incentives, digital services like Unite.et, and a renewed focus on formal banking, NBE is hopeful that it can boost foreign currency inflows and contribute to Ethiopia’s economic development.