Digital Finance

Making the Case for Digital Pension Payments in Ethiopia

Ethiopia’s pension disbursement system remains heavily reliant on in-person, branch-based processes that limit beneficiaries’ ability to access and use their pension funds digitally. Pensioners are required to withdraw payments physically, are restricted from making digital transactions, and must undergo periodic in-person life verification, creating inefficiencies, high administrative costs, and significant physical and financial burdens for elderly beneficiaries. Introducing a digitally enabled pension payment system, linked to secure digital identity and biometric-enabled life verification, will modernize pension delivery by enabling remote access, digital payments, and account-to-account transfers, while strengthening fraud prevention and advancing financial inclusion.

Published By

Team Shega

Published On

09 January 2026

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This report examines the potential benefits and applicability of a digital pension payment system in Ethiopia, with the objective of modernizing pension disbursement and improving access, convenience, and efficiency for beneficiaries. The primary target audiences for this use case report include pension authorities, financial institutions, regulatory bodies such as the National Bank of Ethiopia, technology providers, and development partners engaged in digital financial services and social protection. By addressing the limitations of the current branch-based, cash-reliant pension system, a digitally enabled pension payment solution could enhance service delivery, reduce administrative burdens, and strengthen transparency and fraud prevention. A well-designed system would link pension benefits to secure digital identities, enabling beneficiaries to receive payments digitally, conduct account-to-account transfers, make digital payments, and verify their life status remotely through biometric-enabled mechanisms.