What drives digital finance use in rural Africa? Insights from Ethiopia

Abstract

Despite the growing role of digital finance particularly mobile money in advancing financial inclusion, its use remains limited in many rural parts of Africa. This study examines the drivers of digital finance use in rural Ethiopia, focusing on the adoption and usage intensity of CBE Birr and Telebirr in the Kembata Tambaro Zone. Using the Extended Unified Theory of Acceptance and Use of Technology (UTAUT2), data from 399 respondents were analysed through a double-hurdle model combining binary logit and zero-inflated negative binomial regression. Results show that education, mobile ownership, social influence, trust, perceived ease of use, perceived usefulness, and internet access positively drive adoption, while distance to financial institutions or agents negatively affects it. Usage intensity rises with formal employment, distance to financial institutions, and internet access, while unemployment reduces transaction frequency. Moreover, education, occupation, trust, perceived ease of use and usefulness lower the likelihood of zero transactions. The study confirms that both individual-level and structural factors significantly shape the adoption and intensity of digital finance use in rural Ethiopia. The study emphasizes the need for digital literacy, broader internet access, and context-sensitive service design, while contributing to the literature methodologically by addressing both adoption and usage intensity.