23,659 Cooperatives, One Percent Digitised

In 2023, a business magazine described Awach — then the largest and most celebrated cooperative in Ethiopia — as "currently the only cooperative that installs the core banking system." One cooperative, in a sector of more than twenty-three thousand.

Some named deployments have appeared since. Add up what has been publicly announced and you reach a figure in the low hundreds at most. Cooperative Bank of Oromia's SACCO-Link platform reports somewhere between 42 and 55 cooperatives and unions onboarded. The USAID-backed Kefeta network digitised 18 youth cooperatives. A handful of individual societies — Awach, Amigos, Tederash, Yehulu, Sheger, Horizon — have built core systems, mobile apps or member portals.

Against 23,659 registered primary cooperatives counted by the Ethiopian Cooperative Commission in June 2025, that is well under one percent. The overwhelming majority still record savings in paper ledgers, spreadsheets and memory.

The market is not the problem

It would be easy to read that gap as a sign of a small, poor, unready market. The numbers say otherwise. SACCO deposits passed 50 billion birr in 2023, with more than 15 billion birr in loans disbursed and aggregate capital above 21 billion. Membership reached 8.3 million, 48 percent of them women. Four out of five cooperatives sit in rural areas.

This is not a sector waiting to be created. It is a sector that already exists, already holds member savings at scale, and already has to reconcile, report and audit them. The tooling just hasn't caught up.

Four barriers, and none of them are excuses

The explanations that recur are almost always the same four.

Price. Core banking has traditionally been priced for banks.

A cooperative with three thousand members is not a small bank. It is a different kind of institution, with a different balance sheet, a different regulatory status and a different ability to pay. Software priced against banking-sector budgets is simply out of range, and the quotes that come back are frequently for platforms a fraction of that size could not use well.

Power and connectivity. Roughly half of rural households have no reliable electricity.

Rural electricity access was 43.6 percent in 2023, and internet penetration stood at 21.7 percent at the end of 2025. Any product that assumes continuous uptime, a broadband link and a support engineer on site is designing for a country that does not exist yet.

Skills. Many cooperatives have nobody whose job is information technology.

This is the quiet one. A system can be affordable and available and still fail, because the person who has to keep it running is a finance officer doing their real job at the same time. Training that treats users as people who have day jobs is not a nice extra. It is the part that determines whether the software is still in use in year three.

Opacity. Ethiopian vendors almost never publish prices.

Among the vendors in this market, only a handful publish anything at all — and none of the Ethiopian ones do. For a general manager who has to justify every birr to a board, an unquotable price is not a procurement detail. It is the reason the process stalls before it starts.

Each barrier is a design brief

It is tempting to treat those four as reasons the market will stay small. Read them the other way and they describe exactly what a product for this sector has to be.

• Multi-tenant hosting makes the long tail economically reachable, because thousands of small cooperatives can share one platform and one cost base.
• USSD and SMS reach members on feature phones, which is where most members actually are.
• Local implementation and training address the skills gap directly rather than assuming an IT department appears.
• Published, transparent pricing removes the single largest source of friction in a buying decision.

None of these is technically difficult. They are commercially uncomfortable, which is probably why they are rare.

What changed in the last eighteen months

The infrastructure argument has largely expired. Telebirr closed FY2025/26 with 60.6 million customers and processed ETB 4.19 trillion in a year, roughly a fifth of GDP. Ethiopia counts around 136 million mobile-money accounts, up from fewer than a million in 2020. The national digital ID programme, Fayda, reached about 49.1 million enrolments by August 2026 and is positioned as the country's e-KYC anchor. EthSwitch processed 287.4 million interoperable transactions worth ETB 741.1 billion in FY2024/25, and the instant-payment brand EthioPay launched in December 2025.

Then the policy moved. The National Bank of Ethiopia's National Digital Payments Strategy 2026–2030, launched in December 2025, explicitly identifies the limited digital capacity of cooperatives as a problem and proposes a shared core-banking platform to connect them to national payment rails and digital KYC. Three months later, in March 2026, the central bank announced it would bring SACCOs and pension funds under its supervision, working with the Ethiopian Cooperative Commission.

That combination — rails available, supervision arriving — changes what a system is for. It stops being a discretionary efficiency purchase and starts being the thing that lets a cooperative connect, comply and keep operating.

Even taking that into account, the distance between the two numbers is the whole story of this market — and it is why the next question is not whether cooperatives will digitise, but which ones go first.