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Developing marketing strategies to enhance the use of banking services for the unbanked in Ethiopia.

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Nowadays, banking the unbanked has become critical for developing countries, as most of the households do not hold bank accounts with banks. Currently, only 21.8 percent of the population (age 15+) have an account in financial institutions in Ethiopia. As a result, a huge amount of money circulates outside the banking system, which limits the role of the banks. As a result, this study aims to investigate factors affecting intention of the unbanked to use banking services and propose possible marketing strategies for banking them. The study captured three regions of Ethiopia, using multi-stage cluster sampling technique. Questionnaires were distributed and collected from 384 unbanked respondents and 153 bank managers in the selected regions. For the analysis, descriptive and inferential statistics were applied to test associations of the data set. Measures to facilitate evaluation and interpretation of data include percentage, mean, standard deviation, ANOVA and t-test respectively. Moreover, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were employed to propose and test the structural equation model (SEM). The study found that the marketing strategy employed by banks are limited to traditional banking system, while the use of electronic banking to reach the untapped area to create bank services accessibility is poor. Hence, the degree of awareness of both conventional and e-banking services by the unbanked individuals is significantly very low. It also identified that the unbanked demographic factors (level of education and occupation), perceived ease of use, social influence and personal factor significantly affect their intention to use banking services; whereas, the effect of culture and social support are insignificant. Therefore, Ethiopian banking sector should consider these factors while taking measures to bring the unbanked into the banking system and adopt the strategy of banking beyond bank branches to make accessible their services to a wide geographical area. The study makes an investigative effort to point out where banking institutions should stress in order to successfully bring the unbanked to the banking system and, as a result, harvest its possible benefits. Furthermore, it tests empirically factors affecting the unbanked intention to use banking services, thus providing additional understanding for practitioners and academics.


Doctoral degree. University of KwaZulu-Natal, Durban.