Open banking in Eritrea – Open Banking Nigeria

Eritrea

Overview

Eritrea’s financial sector is underdeveloped and operates under a centralized banking system dominated by state-owned institutions, with the Bank of Eritrea acting as the central authority for all banking and financial operations.

The economy remains largely informal, with limited access to modern banking services, and private banking is prohibited. There are only three state-owned banks—Bank of Eritrea, Commercial Bank of Eritrea, and Commercial and Housing Bank—none of which offer modern financial solutions like ATMs or online banking. This restrictive environment reflects the lack of technological advancements and minimal competition in Eritrea’s financial ecosystem.

Current Status of Open Banking

As of 2024, open banking has not been implemented in Eritrea, and there are no indications of active efforts to introduce it in the coming years. The country’s financial systems remain outdated, with heavy reliance on manual operations. This is in stark contrast to neighboring countries where mobile money services and fintech innovations are gradually bridging the financial inclusion gap.

Eritrea’s banking sector does not support public APIs, nor are there frameworks for data sharing, which are the critical enablers of open banking.

Challenges and Opportunities for Open Banking

If Eritrea were to consider open banking, it could provide innovative solutions to some of the nation’s systemic financial challenges. Currently, Eritrea faces significant gaps in its financial infrastructure, including the absence of a clear regulatory framework to support modern banking practices. This regulatory vacuum inhibits the adoption of global financial technologies and standards, slowing economic modernization.

Additionally, Eritrea lacks essential digital infrastructure, such as online banking platforms and ATMs, which creates substantial barriers to financial inclusion and innovation. These limitations are compounded by the fact that over 70% of Eritreans remain unbanked as of 2024, highlighting the stark divide between Eritrea and its global counterparts in financial accessibility.

Open banking could bridge this gap by enabling financial institutions to leverage alternative data sources to offer tailored financial services to underserved populations. However, implementing open banking would require addressing fundamental challenges.

Looking Ahead

While the concept of open banking is not currently a priority for Eritrea, the global push for digital financial solutions may eventually inspire certain reforms in the far future.

We will continue to monitor developments and provide updates as they become available.

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