Nigat Post
Banking

Ethiopia’s Banking Giant CBE to Charge More for Services: Relief for Its Costs, Headache for Customers

The Commercial Bank of Ethiopia is rolling out new service fees from September, ending the era of free digital banking. While the move helps the bank cover rising costs, it risks adding pressure on households and small businesses already squeezed by inflation raising tough questions about who really pays for Ethiopia’s digital finance boom.

Gemechu Birehanu
5 min read
Ethiopia’s Banking Giant CBE to Charge More for Services: Relief for Its Costs, Headache for Customers

The Commercial Bank of Ethiopia (CBE) is hiking service fees again, this time targeting branch-based transactions too from September 29. It follows an earlier round of adjustments on digital banking once promoted as free but now quietly monetized. The move raises a blunt question: is this a healthy correction in a maturing financial system, or just another cost shift onto Ethiopia’s already squeezed households and businesses?

Customers are Paying for What Used to Be Free

For years, CBE’s pitch or any other commercial banks for digital banking was simple: it saves you time, money, and fuel by avoiding queues. Now, that convenience comes at a price.

  • Small transfers that were once free now cost 3 or more Birr.
  • Medium transfers to wallets like Telebirr carry charges up to 15 Birrs.
  • Large-value transfers can cost upwards. To an urban middle-class customer, that may sound trivial. But for a micro-business transferring 500 birr several times a day, fees pile up. For low-income customers, even a 3 Birr charge can feel punitive when margins are razor-thin. In short, CBE is no longer subsidizing the digital shift it is asking ordinary Ethiopians to finance it.

CBE has Strong Numbers, But Rising Costs

On paper, CBE doesn’t look desperate. It reported 2.3 trillion Birr in assets and a record 1.69 trillion birr in deposits, with over 92% of transactions now digital. That makes it one of the most liquid banks on the continent. So why raise fees? The truth is that running massive digital infrastructure; servers, cybersecurity, integration with wallets is expensive. Free services may win customers, but they bleed the bottom line as transaction volumes explode. This fee shift is less about survival and more about cost recovery and revenue diversification. Still, critics argue the bank is leaning on its near-monopoly position (serving 43.1 million customers) to pass costs onto users rather than pushing for greater efficiency.

The Economic Ripple Effects Beyond CBE

The timing matters. Ethiopia is battling:

  • Double-digit inflation, eroding household incomes.
  • High unemployment, squeezing disposable spending.
  • FX shortages, already forcing importers to raise prices. In this context, even “minor” service fees hit harder. They act like a stealth tax on digital participation, especially for small traders, students, and salaried workers. And because CBE is the system’s anchor, smaller banks may have no choice but to copy its model. The risk is a banking system that becomes more expensive just when Ethiopia is trying to drive financial inclusion.

The Truth

CBE’s decision is neither wholly good nor wholly bad ; it is a double-edged reform:

  • Good for the system: It ensures digital banking isn’t a loss-making experiment and prepares Ethiopia for international competition where fees are standard.
  • Bad for vulnerable customers: It risks slowing the very digital adoption Ethiopia has been trying to accelerate, pushing some back toward cash. The question is whether the bank and regulators will balance sustainability with fairness. Without clear consumer protections or caps, the danger is that Ethiopia’s financial sector modernizes at the expense of those who can least afford it. CBE’s fee adjustments reveal a hard truth: the era of free banking in Ethiopia is ending. That’s not inherently bad it can make the system stronger and more sustainable. But without safeguards, transparency, and competition, it risks deepening inequality in access to finance.

Nigat Post Take: Customers are right to feel uneasy. This is less about “maturity” and more about who shoulders the cost of Ethiopia’s digital future; banks or the people.