One of the major questions you’ll most likely have when expanding your fintech or digital business into Ethiopia’s market is: how do I keep my platform safe?

And it’s a valid concern. Between 2018 and 2022, Ethiopia’s digital sector lost over 1.9 billion birr to fraud. With financial crime this widespread, your platform becomes vulnerable the moment a user signs up.

KYC, or, Know Your Customer is how you verify users, stay compliant, and protect your business from fraud. KYC in Ethiopia goes beyond fraud prevention; it helps detect money laundering, financial scams, and keeps you from running into legal trouble. Ignoring it could lead to fines or even getting blocked from operating.

In this article, I’ll guide you through:

• What the KYC process looks like in Ethiopia
• How to meet compliance requirements in 2025
• The right steps to onboard users
• Common challenges with KYC in Ethiopia
• How to scale eKYC in Ethiopia with real-time, biometric tools like Dojah

KYC Requirements and AML Compliance in Ethiopia

KYC processes in Ethiopia are regulated and enforced through the Anti-Money Laundering and Terrorism Financing Proclamation, the Oversight of National Payment System Directive, and the country’s Data Protection Directive (DPD).

This AML law forms the core of Ethiopia’s anti-money laundering (AML) and counter-terrorist financing (CTF) framework. It mandates all regulated entities to implement effective customer due diligence measures to identify and prevent financial crimes. 

Who Must Comply With Ethiopia’s AML Laws?

Ethiopia’s KYC and AML requirements apply to a wide range of regulated industries. If your business operates in any of the categories below, compliance is vital:

• Banks and other financial institutions
• Fintech companies and digital payment providers
• Insurance firms and brokers
• Telecom operators offering mobile money or financial services
• Forex bureaus and remittance service providers
• Accountants, legal practitioners, and other designated non-financial businesses and professions (DNFBPs)

What Happens If You Don’t Comply?

Failure to comply with KYC and AML laws in Ethiopia can come with major consequences like:

• Regulatory actions such as penalties, suspensions, or loss of operating license by the NBE or the FIC
• Criminal penalties of 3 to 5 years imprisonment and fines between ETB 5,000 and ETB 10,000 for individuals
• Damage to your brand’s reputation and loss of customer confidence
   

                     Non-compliance can slow down your growth and expose your business to regulatory risks. With tools like Dojah, you can simplify compliance checks and verify your customers in Ethiopia faster.

Requirements for KYC in Ethiopia and Accepted Documents

KYC requirements in Ethiopia depend on the type of customer and service. To meet Ethiopia’s AML regulations and onboarding standards, make sure you collect the right documents:

1. Proof of Identity

You must require valid, government-issued identification. Commonly accepted forms are:

• Ethiopian National ID (“Fayda”) – the main ID for citizens
• Ethiopian Passport – used by residents and non-residents
• Driver’s License – accepted as a secondary ID alongside National ID or passport 

2.    Proof of Residential Address

To confirm a customer’s residence, request recent documents such as:

• Utility bills or bank statements
• Residence permit card (for foreigners) 

3.   Business Verification Documents (for corporate customers)

 When onboarding a company, ask for:

• Certificate of business registration
• Tax Identification Number (TIN)
• Proof of business address (e.g., utility bill or lease)
• Names of directors and company representatives 

4.    Additional Supporting Information

For foreign nationals or non-residents, also request:

• Valid residence permit or non-citizen ID
• Passport details and date of entry into Ethiopia

5.   Ongoing KYC and Record‑Keeping

All collected documents must be verified for legitimacy. Customer details such as address, occupation, and risk profile must be updated regularly. Biometric or e‑KYC tools are often used to cross‑check against Ethiopia’s national identity records.

How KYC Works in Ethiopia: A Step-by-Step Guide

If you're running a fintech or digital business in Ethiopia, here's how the KYC process typically works. These are the key steps you’ll need to follow to stay compliant and onboard customers safely.

Step 1: Identity Capture

Start by collecting your customer’s Fayda National ID (for citizens) or Ethiopian passport (for non-citizens). Get basic details like full name, date of birth, and address. The Fayda ID is now the official KYC document for banks and fintech.

Step 2: Biometric Verification

You’ll need to verify the person’s identity using biometrics like facial recognition or fingerprints. This helps confirm they match the official records and reduces fraud.

Step 3: Record Updating

Use the ID data to automatically fill in the customer profile. If they’ve changed their address or phone number, update it. If things like their name or date of birth don’t match, they’ll need to fix that with the Fayda registration office.

Step 4: Customer Due Diligence (CDD)

You have to screen each customer against watchlists, like UN sanctions or PEP databases. If someone is high-risk, collect more info like their source of funds or business type.

Step 5: Ongoing Monitoring

Keep an eye on customer activity. Set up alerts and review profiles from time to time. If you notice suspicious behavior, report it to the Financial Intelligence Centre (FIC).

Step 6: Special Scenarios

There are lighter KYC rules for small accounts or wallets. For example, low-value accounts may not need full documentation. If a non-resident wants to use your service, you can verify them using their passport and entry records.

          Want to make your KYC process easier? Use Dojah for seamless verification and faster onboarding.  Learn more about how to get started. 

Digital/eKYC Trends in Ethiopia

Ethiopia is steadily moving toward a fully digital KYC system, led by the rollout of the Fayda national ID. As of January 2025, all banks in Addis Ababa are required to verify customers using Fayda, and by December 2026, this will be mandatory nationwide.

Traditional methods like manual ID checks or physical documents are being phased out, as they increase the risk of fraud and data entry errors. Fayda now supports real-time biometric verification, making it easier for financial institutions to confirm identities.

Today, tools like facial recognition, document capture, and liveness checks are being adopted across banks, fintech, and microfinance institutions. These technologies help reduce onboarding risks and ensure compliance with Ethiopia’s evolving AML guidelines.

In June 2025, the Ethiopian Capital Market Authority also hosted a stakeholder meeting to discuss new draft KYC/AML directives. These upcoming rules are expected to push for tighter onboarding standards, especially around the integration of Fayda and eKYC systems.

As eKYC becomes the standard across the country, now is the time to explore digital verification tools that help you stay compliant.

Common KYC Challenges When Expanding into Ethiopia

Here are some of the KYC challenges you’re likely to face when entering the Ethiopian market:

1. Limited Access to Digital IDs and Standard Documents

Ethiopia’s national digital ID system, Fayda, is still rolling out and won’t be fully mandatory until 2026. Until then, you’ll likely deal with inconsistent ID types and formats, especially in rural areas. Verifying identities becomes more difficult when documents aren’t standardized or easily authenticated.

2.   Gaps in Regulatory Data Infrastructure

Accessing reliable data on individuals and legal entities is a common challenge. There’s still no unified database for KYC checks, and many government registries are fragmented or not easily searchable. This slows down onboarding and increases the time your team spends verifying customer information.

3.   Ongoing Risk of Identity Fraud

Forged documents and fraudulent IDs are a real concern in Ethiopia, especially when most checks are manual. Without access to strong verification systems, it becomes harder to catch deepfakes or other sophisticated fraud attempts that could expose your platform to regulatory and reputational risk.

4.   Lack of Integration Between Institutions

Many banks, fintech, and regulators still operate in silos. This means your team might request the same information multiple times or find conflicting data across systems. Without strong interoperability, enhanced due diligence and transaction monitoring will take more effort than expected.

5.   Managing Compliance Needs as You Grow

Meeting Ethiopia’s growing KYC expectations will likely require new tools, staff training, and continuous monitoring. For early-stage startups or businesses new to the region, staying compliant can feel heavy on resources, especially if you’re still building your local team and systems.
 

Simplify KYC in Ethiopia and Save Time with Dojah

KYC in Ethiopia can be a hassle without the right setup or clear process. You might face manual reviews, delayed approvals, or repeated ID requests that slow down onboarding and frustrate your users. All this while trying to keep up with Ethiopia’s evolving KYC and compliance standards.

 That’s where Dojah steps in. Dojah helps you stay compliant without losing speed, users, or sleep.

With Dojah, you can:

• Verify Ethiopia IDs instantly, using facial recognition and liveness checks connected directly to the NIA database.
• Make onboarding faster with  AI-powered document checks and automated AML screening.
• Get started quickly with easy-to-use APIs and low-code tools, so your developers don’t get stuck setting everything up.

Our KYC solutions are fast, localized, easy to integrate, and trusted by top African businesses.

👉  See how Dojah helped Cleva power safe international payments across Africa.

Dojah offered us a seamless verification service via phone number data extraction that made our customer onboarding and verification process effortless. We’ve seen a clear boost in productivity since partnering with them.
 — Joseph Okoroafor, Head of Marketing & Communications, WellaHealth

👉 Book a demo to get started today.

Frequently Asked Questions About KYC in Ethiopia

What is the KYC process in Ethiopia?
You need to collect a customer’s Fayda ID or passport, verify it using biometric checks, screen for AML risks, and store the data securely.

Can I run KYC checks online in Ethiopia?
Yes. You can verify users online using the Fayda system, facial recognition, and document uploads. Some tools connect directly to national databases.

How long does KYC onboarding usually take?
Digital verification can be done in seconds. Manual checks or missing information can slow things down.

What are the biggest KYC challenges for fintechs in Ethiopia?
Some of the main issues include inconsistent digital ID access, infrastructure gaps, and limited data availability for verification.

Do I need a local license to onboard users in Ethiopia?
Yes. You must be licensed by the National Bank of Ethiopia or relevant authorities and follow local KYC and AML regulations.

How can I check an Ethiopian driving license online?
Currently, there is no central public portal for driving license verification. Most checks are done through regional systems or KYC tools that connect with government data.

Is there a KYC portal in Ethiopia?
There is no single public-facing portal. Businesses use tools that integrate with the Fayda system or work through licensed third-party providers.

How can Dojah help with KYC in Ethiopia?
Dojah lets you verify identities through Fayda, perform biometric authentication, run AML checks, and onboard users faster with a single API.