Determinants of Mobile Banking Adoption in Ethiopia: Evidence from Awash Bank S.C. and Implications for Financial Inclusion

Abstract

 This study examines the determinants of mobile banking adoption in Ethiopia using evidence from customers of Awash Bank S.C. Drawing on the Technology Acceptance Model (TAM) and Innovation Diffusion Theory (IDT), the study analyzes the influence of awareness, perceived usefulness, perceived ease of use, self-efficacy, perceived risk, perceived cost, compatibility, and relative advantage on adoption behavior. Primary data were collected from 374 customers through a structured questionnaire and analyzed using logistic regression techniques. The findings reveal that awareness, perceived usefulness, relative advantage, and perceived risk significantly influence mobile banking adoption. Awareness emerged as the most influential factor, indicating that limited customer knowledge remains a major barrier to adoption. Perceived risk was found to negatively affect adoption, highlighting persistent concerns regarding security and trust. Interestingly, perceived ease of use and compatibility were found to have significant negative effects, suggesting that traditional technology adoption models may not fully explain customer behavior in the Ethiopian context. These findings provide important insights into the challenges of digital financial transformation in developing economies. The study contributes to the literature on digital financial services in Africa and offers practical implications for financial institutions and policymakers seeking to enhance digital financial inclusion.