Enhancing financial inclusion of older urban poor in Ethiopia


Recent research carried out by HelpAge International in collaboration with the Ethiopian Policy Study Institute aimed to better understand financial inclusion of older people in the financial system of Ethiopia, and the obstacles they face with access to formal and informal financial services in poor urban areas.  

In Ethiopia, the financial inclusion of older people remains low as the financial system mainly serves people in higher income groups. 

Financial inclusion

Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.

Enhancing financial inclusion of older urban poor in Ethiopia

This policy brief focuses on enhancing financial inclusion for Ethiopia’s older urban poor, emphasising the importance of access to formal financial services like banking, savings, loans, and insurance.

Research highlights a gender gap in financial access, revealing a 9% higher likelihood for men to access services compared to women, prompting the need for policy interventions and recommendations outlined in the brief to address these challenges.

Read the policy brief here.

Our research has thrown up the following key findings: 

  • While progress has been made, financial inclusion in Ethiopia remains low. 
  • Amongst older urban poor, account ownership is higher at formal financial institutions (compared to informal institutions). The main reason that deters older people from opening accounts is low income. 
  • The older urban poor practice a poor saving culture – less than 30 per cent save money at fornmal financial institutions. 
  • About 10 per cent of the older urban poor have borrowed money from someone outside their household. 
  • Older people could be excluded from accessing loans due to limited engagement in business, a lack of collateral, and low income. 
  • Nearly 76 per cent of the older urban poor use formal insurance products, including health insurance, life insurance, car insurance, and property insurance. 
  • Older people have relatively good access to mobile phones, but they have very limited access to mobile banking and mobile money services. 

General access to financial services 

There are several reasons that may deter people from opening accounts at formal financial institutions. For most older respondents (62.5 percent), the main reason was “I do not feel that my money is enough to save in a bank”.  


Almost 28 per cent of older respondents had savings at formal financial institutions in the past 12 months. Existing evidence suggests that an increase in age significantly reduces formal savings. The reason may be that as people age, they become consumers instead of savers. 

An interview with an older people’s association leader highlighted that the majority of the 80 members of the association do not have access to savings. He said: “Older people have limited knowledge about saving, limited financial resources, and a poor saving culture”. 

Access to loans and credit 

Access to loans and credit is essential for day-to-day economic activities and for the overall economic growth of a country. It is one of the fundamental indicators of financial inclusion. 

In the last 12 months, 11.43 per cent of older respondents had access to loans. They borrowed money from someone outside their household. Banks are less willing to provide credit to older people because of their age, which limits their engagement in business and their lack of collateral to insure loans. 

Older people in Addis Ababa do have access to credit/loans from financial institutions in our community. Of course, financial institutions do have a fear of providing loans to older people. This is because of our age. […] Financial institutions prefer to support people who have a better political advantage.

Older people’s association leader

Recommendations to increase the financial inclusion of older people in Ethiopia:

  • Develop and introduce tailored financial products and/or benefit packages such as products with interest rate adjustments to cater to the needs of older and poorer customers.
  • Financial institutions should relax the collateral requirements, taking the income of the poor into account, to enhance credit use among older people. Innovative and more inclusive business models are critically essential.
  • Promote and create more understanding of the benefits of saving among older people
  • Support older people by creating more awareness and providing trainings to improve digital literacy and digital financial inclusion.
  • support activities that enhance the income-generating capacity of older people to enable them to participate in formal financial institutions.