Financial inclusion remains a persistent challenge in developing economies, where access to formal credit is often constrained by stringent collateral requirements. This challenge is particularly evident in Ethiopia, where many micro, small, and medium enterprises (MSMEs), women, youth, and rural households remain excluded from financial services despite having viable economic activities and repayment potential. Within Islamic finance, Murabahah was designed as an asset-based and ethical financing mechanism that promotes fairness and economic participation. However, many Islamic financial institutions continue to rely on conventional collateral requirements, limiting access for asset-poor populations. This study investigates how digital Murabahah financing integrated with artificial intelligence (AI)-based credit scoring can reduce dependence on physical collateral and enhance financial inclusion in Ethiopia while maintaining Shariah compliance. Employing a qualitative document analysis approach, the study examines reports from Islamic financial institutions, fintech companies, development organizations, regulatory bodies, and industry publications. The findings indicate that emerging digital Murabahah platforms have introduced collateral-free financing models by utilizing alternative data sources, including mobile money transactions, utility payments, e-commerce activities, and behavioral indicators, to assess creditworthiness. Available evidence suggests that these initiatives have expanded access to financing among women, youth, first-time borrowers, and rural communities while supporting business growth and employment creation. Nevertheless, challenges related to AI transparency, algorithmic fairness, data governance, and Shariah oversight remain significant. The study concludes that AI-enabled digital Murabahah presents a promising pathway for advancing inclusive Islamic finance in Ethiopia, provided that robust regulatory, ethical, and consumer protection frameworks are established.