Mandatory Digital ID integration with bank accounts for financial inclusion

The National Bank of Ethiopia and the National ID Program (NIDP) jointly announced a mandatory digital ID integration initiative for banking in November 2023. The rollout followed a phased plan. The pilot began in Addis Ababa on 1st January 2025, followed by expansion to major cities in Ethiopia on 1st July 2025, and a nationwide rollout on 1st January 2026. As per the plan, all bank account holders must link accounts to Fayda IDs by 31st December 2026.

The initiative uses Fayda, Ethiopia’s national digital ID, for electronic know your customer (e-KYC) processes and enables reliable real-time identity verification during customer onboarding, the launch of digital products, and financial risk control.

A time-and-motion study revealed significant efficiency gains. Banks reported time savings of 17% to 63%. Notably, an institution even reduced account opening from 43 minutes to 9 minutes through Fayda-based e-KYC.