Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa

Abebe Tilahun Kassaye; Tigist Belachew; Kiros Haftu

doi:doi:10.11648/j.jbed.20251002.14

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Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa

Abebe Tilahun Kassaye^*

, Tigist Belachew, Kiros Haftu

Published in Journal of Business and Economic Development (Volume 10, Issue 2)

Received: 19 April 2025 Accepted: 7 May 2025 Published: 16 June 2025

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Abstract

Ethiopia's digital economy is still developing, with only a limited number of private sector companies offering online services and a few government-sponsored initiatives aimed at digitalization. This study explores the factors influencing customers' utilization of digital banking as a pathway to a cash-lite economy, focusing on evidence from Addis Ababa. The research is framed within the Unified Theory of Acceptance and Use of Technology (UTAUT2) and employs a quantitative approach using a descriptive and explanatory research design. We collected primary data from customers of commercial banks in Addis Ababa. Accordingly, 428 questionnaires were distributed to customers of commercial banks in Addis Ababa using the convenience sampling method, and 405 responses were properly filled out with a response rate of 94.62%. The overall reliability, measured by Cronbach's alpha, was found to be 0.913. The findings indicate that performance expectancy, facilitating conditions, hedonic motivation, and habit significantly and positively influence digital banking utilization, supporting the hypothesis. In contrast, effort expectancy, social influence, and price value were found to be insignificant factors. The study concludes that increased digital banking utilization can facilitate progress toward a cash-lite economy. To encourage customers to adopt digital banking services, commercial banks should develop strategies to raise awareness and create incentive mechanisms. Additionally, the national bank should establish a legal framework to monitor and evaluate digital banking transactions within commercial banks, promoting the transition to a cash-lite economy.

Published in	Journal of Business and Economic Development (Volume 10, Issue 2)
DOI	10.11648/j.jbed.20251002.14
Page(s)	81-93
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2025. Published by Science Publishing Group

Keywords

Determinants, UTAUT2, Digital Banking, Cash-lite Economy, Commercial Banks, Addis Ababa

References

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APA Style

Kassaye, A. T., Belachew, T., Haftu, K. (2025). Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. Journal of Business and Economic Development, 10(2), 81-93. https://doi.org/10.11648/j.jbed.20251002.14

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ACS Style

Kassaye, A. T.; Belachew, T.; Haftu, K. Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. J. Bus. Econ. Dev. 2025, 10(2), 81-93. doi: 10.11648/j.jbed.20251002.14

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AMA Style

Kassaye AT, Belachew T, Haftu K. Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. J Bus Econ Dev. 2025;10(2):81-93. doi: 10.11648/j.jbed.20251002.14

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@article{10.11648/j.jbed.20251002.14,
  author = {Abebe Tilahun Kassaye and Tigist Belachew and Kiros Haftu},
  title = {Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa
},
  journal = {Journal of Business and Economic Development},
  volume = {10},
  number = {2},
  pages = {81-93},
  doi = {10.11648/j.jbed.20251002.14},
  url = {https://doi.org/10.11648/j.jbed.20251002.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20251002.14},
  abstract = {Ethiopia's digital economy is still developing, with only a limited number of private sector companies offering online services and a few government-sponsored initiatives aimed at digitalization. This study explores the factors influencing customers' utilization of digital banking as a pathway to a cash-lite economy, focusing on evidence from Addis Ababa. The research is framed within the Unified Theory of Acceptance and Use of Technology (UTAUT2) and employs a quantitative approach using a descriptive and explanatory research design. We collected primary data from customers of commercial banks in Addis Ababa. Accordingly, 428 questionnaires were distributed to customers of commercial banks in Addis Ababa using the convenience sampling method, and 405 responses were properly filled out with a response rate of 94.62%. The overall reliability, measured by Cronbach's alpha, was found to be 0.913. The findings indicate that performance expectancy, facilitating conditions, hedonic motivation, and habit significantly and positively influence digital banking utilization, supporting the hypothesis. In contrast, effort expectancy, social influence, and price value were found to be insignificant factors. The study concludes that increased digital banking utilization can facilitate progress toward a cash-lite economy. To encourage customers to adopt digital banking services, commercial banks should develop strategies to raise awareness and create incentive mechanisms. Additionally, the national bank should establish a legal framework to monitor and evaluate digital banking transactions within commercial banks, promoting the transition to a cash-lite economy.
},
 year = {2025}
}

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TY  - JOUR
T1  - Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa

AU  - Abebe Tilahun Kassaye
AU  - Tigist Belachew
AU  - Kiros Haftu
Y1  - 2025/06/16
PY  - 2025
N1  - https://doi.org/10.11648/j.jbed.20251002.14
DO  - 10.11648/j.jbed.20251002.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 81
EP  - 93
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20251002.14
AB  - Ethiopia's digital economy is still developing, with only a limited number of private sector companies offering online services and a few government-sponsored initiatives aimed at digitalization. This study explores the factors influencing customers' utilization of digital banking as a pathway to a cash-lite economy, focusing on evidence from Addis Ababa. The research is framed within the Unified Theory of Acceptance and Use of Technology (UTAUT2) and employs a quantitative approach using a descriptive and explanatory research design. We collected primary data from customers of commercial banks in Addis Ababa. Accordingly, 428 questionnaires were distributed to customers of commercial banks in Addis Ababa using the convenience sampling method, and 405 responses were properly filled out with a response rate of 94.62%. The overall reliability, measured by Cronbach's alpha, was found to be 0.913. The findings indicate that performance expectancy, facilitating conditions, hedonic motivation, and habit significantly and positively influence digital banking utilization, supporting the hypothesis. In contrast, effort expectancy, social influence, and price value were found to be insignificant factors. The study concludes that increased digital banking utilization can facilitate progress toward a cash-lite economy. To encourage customers to adopt digital banking services, commercial banks should develop strategies to raise awareness and create incentive mechanisms. Additionally, the national bank should establish a legal framework to monitor and evaluate digital banking transactions within commercial banks, promoting the transition to a cash-lite economy.

VL  - 10
IS  - 2
ER  -

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Author Information

Abebe Tilahun Kassaye

Department of Public Financial Management and Accounting, Ethiopian Civil Service University, Addis Ababa, Ethiopia

Contact Email

http://orcid.org/0000-0003-3681-6813
Tigist Belachew

Department of Public Financial Management and Accounting, Ethiopian Civil Service University, Addis Ababa, Ethiopia

Contact Email
Kiros Haftu

Department of Public Financial Management and Accounting, Ethiopian Civil Service University, Addis Ababa, Ethiopia

Contact Email

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Plain Text BibTeX RIS

APA Style

Kassaye, A. T., Belachew, T., Haftu, K. (2025). Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. Journal of Business and Economic Development, 10(2), 81-93. https://doi.org/10.11648/j.jbed.20251002.14

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ACS Style

Kassaye, A. T.; Belachew, T.; Haftu, K. Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. J. Bus. Econ. Dev. 2025, 10(2), 81-93. doi: 10.11648/j.jbed.20251002.14

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AMA Style

Kassaye AT, Belachew T, Haftu K. Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa. J Bus Econ Dev. 2025;10(2):81-93. doi: 10.11648/j.jbed.20251002.14

Copy | Download

@article{10.11648/j.jbed.20251002.14,
  author = {Abebe Tilahun Kassaye and Tigist Belachew and Kiros Haftu},
  title = {Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa
},
  journal = {Journal of Business and Economic Development},
  volume = {10},
  number = {2},
  pages = {81-93},
  doi = {10.11648/j.jbed.20251002.14},
  url = {https://doi.org/10.11648/j.jbed.20251002.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20251002.14},
  abstract = {Ethiopia's digital economy is still developing, with only a limited number of private sector companies offering online services and a few government-sponsored initiatives aimed at digitalization. This study explores the factors influencing customers' utilization of digital banking as a pathway to a cash-lite economy, focusing on evidence from Addis Ababa. The research is framed within the Unified Theory of Acceptance and Use of Technology (UTAUT2) and employs a quantitative approach using a descriptive and explanatory research design. We collected primary data from customers of commercial banks in Addis Ababa. Accordingly, 428 questionnaires were distributed to customers of commercial banks in Addis Ababa using the convenience sampling method, and 405 responses were properly filled out with a response rate of 94.62%. The overall reliability, measured by Cronbach's alpha, was found to be 0.913. The findings indicate that performance expectancy, facilitating conditions, hedonic motivation, and habit significantly and positively influence digital banking utilization, supporting the hypothesis. In contrast, effort expectancy, social influence, and price value were found to be insignificant factors. The study concludes that increased digital banking utilization can facilitate progress toward a cash-lite economy. To encourage customers to adopt digital banking services, commercial banks should develop strategies to raise awareness and create incentive mechanisms. Additionally, the national bank should establish a legal framework to monitor and evaluate digital banking transactions within commercial banks, promoting the transition to a cash-lite economy.
},
 year = {2025}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Customers' Digital Banking Utilization a Pathway to Cash-Lite Economy: Evidence from Addis Ababa

AU  - Abebe Tilahun Kassaye
AU  - Tigist Belachew
AU  - Kiros Haftu
Y1  - 2025/06/16
PY  - 2025
N1  - https://doi.org/10.11648/j.jbed.20251002.14
DO  - 10.11648/j.jbed.20251002.14
T2  - Journal of Business and Economic Development
JF  - Journal of Business and Economic Development
JO  - Journal of Business and Economic Development
SP  - 81
EP  - 93
PB  - Science Publishing Group
SN  - 2637-3874
UR  - https://doi.org/10.11648/j.jbed.20251002.14
AB  - Ethiopia's digital economy is still developing, with only a limited number of private sector companies offering online services and a few government-sponsored initiatives aimed at digitalization. This study explores the factors influencing customers' utilization of digital banking as a pathway to a cash-lite economy, focusing on evidence from Addis Ababa. The research is framed within the Unified Theory of Acceptance and Use of Technology (UTAUT2) and employs a quantitative approach using a descriptive and explanatory research design. We collected primary data from customers of commercial banks in Addis Ababa. Accordingly, 428 questionnaires were distributed to customers of commercial banks in Addis Ababa using the convenience sampling method, and 405 responses were properly filled out with a response rate of 94.62%. The overall reliability, measured by Cronbach's alpha, was found to be 0.913. The findings indicate that performance expectancy, facilitating conditions, hedonic motivation, and habit significantly and positively influence digital banking utilization, supporting the hypothesis. In contrast, effort expectancy, social influence, and price value were found to be insignificant factors. The study concludes that increased digital banking utilization can facilitate progress toward a cash-lite economy. To encourage customers to adopt digital banking services, commercial banks should develop strategies to raise awareness and create incentive mechanisms. Additionally, the national bank should establish a legal framework to monitor and evaluate digital banking transactions within commercial banks, promoting the transition to a cash-lite economy.

VL  - 10
IS  - 2
ER  -

Copy | Download