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Month: December 2018

Rent Tremor

Posted on by Web Master

In a move reminiscent of overnight capitalist reforms in the post-Soviet 90s, the Federal Housing Corporation sent letters to thousands of tenants of its commercial units in mid-December that sent shock waves through Addis Abeba’s business community. The Corporation, after conducting a market survey, slapped an average increase of 2,090pc on its state-owned units, effective January 2019.

Devastated by the news, some tenants organised a committee and protested, demonstrating in front of the head quarter of the Corporation on Monday, December 24, 2018, on Ras Mekonnen Avenue, near La Gare area. Their demands were not specifically against the increase in rental fees but that there were no proper consultations. They also took issue with the evaluation methods, pointing out that the surveys were poorly conducted and did not take into account important variables such as the conditions of the properties and floor levels. The protesting tenants were not impressed either by how the Corporation used current market prices – which it denies – to determine rates for state-owned properties they say have no parking spaces, alternate sources of electricity and, in some cases, elevators.

The largest rent increases were in the National Stadium area, where a whopping average rent hike of 6,784pc was imposed on tenements. Not having altered rental rates in 43 years, tenants of commercial units that were rented for a monthly fee of 674 Br received letters informing them to start paying 46,400 Br beginning in January of the New Year. It was a corrective measure the Corporation believes should be enforced after its survey found that 65pc of all the tenants in its commercial units were paying between 65 Br and 95 Br a square metre.

Although many tenants at private properties as well as experts believe the matter could have been handled more smoothly, there is a belief that the adjustment of the rental rates in a city where the demand for land is outstripping supply is overdue.

The tenants feel wronged, and failing to resolve the issue on the day of the protest, they are looking forward to Thursday, January 3, 2018, when the Corporation’s Director, Reshad Kemal, has pledged to hold talks over the matter. YOU CAN READ THE FULL AGENDA PIECE HERE.

Shareholders Disrupt Hidasie’s Assembly

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The general assembly of Hidasie Telecom, a local telecom products and services distributor, was disrupted in a dispute following a demand by shareholders to remove the board of directors.

The company’s sixth general assembly was called for last Sunday, December 23, 2018, to discuss three agenda: to hear last fiscal year’s financial report, to consider raising the par value of shares and to decide the size of dividends.

However, the meeting was interrupted by calls demanding the removal of the 12-member board of directors chaired by Yhohannes Abebe over poor performance.

During the opening session of the meeting held at Global Hotel, on Sierra Leone Street, some shareholders called for the election of a new board of directors.

The Chairman, announced that the issue raised was not part of the agenda.

“But if you demand this, we can call for an extraordinary meeting,” Yohannes informed the assembly.

He also asked that a vote be held to proceed with the meeting. His call was rejected as the gathering turned into a protest and the back-and-forth berating lasted almost two hours, at which point the board and the management of the company adjourned and postponed the assembly.

“Four months ago we filed a petition requesting the removal of the board of directors, though the meeting was not made part of the agenda,” said one of the protesters who asked to remain anonymous.

“No petition was received by the board or the management,” Yohannes told Fortune.

Established seven years ago, the company declared a net profit of 138.6 million Br last fiscal year, a 143pc increase from the previous year. Hidasie, founded by former employees of Ethio telecom laid off during a restructuring of the state telecom company, had an initial capitalization of 200,000 Br and 2,508 shareholders and currently employs 4,181 people in temporary and permanent positions. The company has issued one million shares total.

The company’s business includes distribution of mobile prepaid cards, SIM cards, bill collection, vehicle maintenance and sales of mobile phones and parts. It operates from nearly 800 outlets and generated 1.29 billion Br in revenues last year, an 18.17pc rise from two years ago.

Gosaye Demissie, CEO of the company, rejects the call from some shareholders and points to the profitability of the company and the fact that the firm is constructing a 620 million Br headquarters in the Hayahulet area.

“Those who raise the call for the board removal are those who want a seat on the board,” said Gosaye.

Ephram Birhanu, a trained lawyer and a lecturer at Addis Abeba University, argues that the shareholders’ demand for the election of a board of directors is not legally acceptable.

Shareholders can only demand the election of the board of directors in a regular general assembly, if board members were found involved in corruption and other crimes, according to him.

“Even to carry out the demand, one-fourth of the shareholders should agree to call for an extraordinary meeting,” Ephram said.

The protest action by some shareholders may have an effect on the company, according to him.

“To hold another meeting, the company will spend money to rent a hall and buy refreshments,” he said. “The approval of the minutes of the general assembly will be delayed and dividends will not be paid to the shareholders on time.”

The schedule of the next general assembly meeting has not been decided yet, according to Yohannes.

The next general assembly meeting is scheduled for January 7, 2019, according to an official at the Ministry of Trade & Industry.

“We mediated between the two parties, and they have agreed to hold the meeting on the new scheduled date,” said this official.

MetEC Ousts Half of Employees

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The state-owned military-industrial conglomerate, Metals & Engineering Corporation (MetEC), which has been in hot water for the past four months, is shrinking by reducing its staff size by more than half.

With 19,500 employees recruited from the military and civilians, the Corporation will be left with roughly 8,000 employees after terminations and transfers of employees to other institutions.

“The lay off will be made to keep the company from failure,” said a senior executive close to the case. “As the company lost its good faith and actual projects, it is in a financial mess.”

For staff reduction, the management of the Corporation prepared five schemes including transferring employees to the Ministry of Defense and state-owned enterprises, terminations of employment agreements for contract, project and for graduates of Addis Raey Training Centre.

Half of the outgoing employees will leave the Corporation by being transferred to the Ministry of Defense, which will be managing three industries that will split from MetEC. The nearly 5,000 employees will be moving to Homicho Ammunition Engineering Complex, Gafat Armament Engineering Complex, Dejen Aviation Engineering Industry and Bishoftu Automotive Industry, which the Defence Ministry will manage.

Close to 2,500 project employees who had been on duty at Tana Beles I and Omo Kuraz I sugar projects and the Great Ethiopian Renaissance Dam have has already been terminated by the Corporation.

The employment agreement of 50 contract employees, which have been working at the Corporation after their retirements, will be terminated as of January 9, 2019. About 200 employees that have been working at Welding at Metal & Fabrication Industry of the Corporation have also been terminated.

An additional 2,400 employees that graduated from Addis Raey Training Centre, a project launched by MetEC and Elshadai Relief & Development Association, will be fully expelled. The graduates were trained for seven months in Awash town in construction, farming, garments and manufacturing and were hired by the Corporation at different industries.

For the third quarter of this fiscal year, MetEC has targeted to focus on reforms and ceasing operations. Even after resuming productions, the company will be focusing on manufacturing consumables such as transformers and plastic products, according to a source close to the case.

“Projects like factory commissioning will end afterwards,” said the same source.

To recover from financial difficulties and to commence operations, the company is planning to float a tender to sell properties valued at 14 billion Br, which were found during the latest audit at the Corporation. Nearly two dozen senior officials of the Corporation are under police custody accused of crimes of corruption.

Since last April, when the administration of Prime Minister Abiy Ahmed (PhD) came to power, the Corporation has been going through a series of turmoils. It’s founding CEO, Kinfe Dagnew (Maj. Gen) is under police custody suspected of high corruptions; and the company’s contract for major mega projects with the state, including two sugar factories, the renaissance dam and fertiliser factories have been terminated.

The Corporation is also splitting into two parts – commercial and defence units – following an order by Prime Minister Abiy. Industries of MetEC which manufacture defence-related machinery and equipment will be transferred to the Defence Ministry, according to a draft regulation that is pending at the Council of Ministers.

Upon approval, the regulation will also change the name of the Corporation to National Industrial Engineering Corporation, narrowing down the scope of the Corporation’s tasks. Incorporating over 90 companies operating in 15 industries, MetEC was established at the initiation of the late Prime Minister, Meles Zenawi, who envisioned the company to be a major tool for industrialisation and transformation to take the country to middle-income status.

Board Removes State Printer CEO

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The board of the Berhanena Selam Printing Enterprise, the state printing press giant, dismissed Teka Abadi, CEO of the Enterprise, effective Friday, December 29, 2018.

Chaired by Worku Guangual, state minister for Good Governance at the Office of the Prime Minister, the board appointed Shitawhun Wale, deputy executive officer in charge of the printing division at the Enterprise, as acting CEO.

The dismissal of Teka was authorised by the board during a two-hour meeting. The meeting, which started at 8:00am in the morning, concluded with a vote to dismiss Teka, who was accused of failing to restore industrial harmony at the Enterprise and for implementing an authoritarian administration.

Following continuous complaints lodged by employees over two years, the board, which has been chaired by Kebede Chane, started reviewing and investigating the case, according to a board member who commented on the condition of anonymity.

However, the recent move to resolve the issue began on December 15, 2018, when a meeting between the board and some employees was first held. During the meeting, the employees raised concerns and issues against the CEO including firing employees without cause, improperly hiring employees with personal connections and illegal procurements.

A second meeting was held on December 22, 2018, where the board and the management of the company met. During the meeting, over three-fourths of the management raised their concern about Teka, according to people who attended the meeting. The meeting was adjourned until December 29, 2018 when the board passed a final decision.

Teka said he is not totally informed about the board’s decision.

“There is no evidence that supports the allegations against me, including failure to maintain industrial peace and poor management,” Teka told Fortune.

Teka mentioned that he has achieved various things in his tenure including the establishment of a printing training centre, starting the printing of 11 different textbooks for grades 7-12, increasing sales revenue and profit, adaptation of the International Financial Reporting System (IFRS) for accounting and ensuring various benefit packages were created for employees.

Teka was appointed CEO in 2013, after working at Artistic Printing Enterprise for a decade, replacing Muluworq G. Hiwot, who had led the company for over two decades. Before joining Artistic, he served for a decade and a half as administrative director for Commercial Printing Enterprise.

A graduate of Asmera University in foreign language and literature studies, he also attended the United Kingdom Open University where he earned a master’s degree in business administration.

Established in 1922 as the first modern printing press in Ethiopia during the reign of Emperor Haile Selassie, Berhanena Selam’s paid-up capital has reached 1.5 billion Br. In 1965, the company built its present head office and printing press in Arat Kilo. The printing press has expanded its services by constructing a new seven-storey building as a training centre, which was inaugurated two years ago at the 95th jubilees anniversary of the Enterprise.

Operating under the Public Enterprises Holding & Administration Agency, the Enterprise reported 138.1 million Br in net profit during the past fiscal year, declining by 28.4 million Br from two years ago. The company has three branches, six sales offices and holds 40pc of market share in the country. The company imports 85pc of its raw material and publishes both print media products and security documents.

 

Hyatt Regency Adorns Addis Abeba

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Hyatt Regency is becoming the eighth international franchise hotel to join the hospitality industry in the capital with a soft opening to be held on December 31, 2018.

Built to a five-star standard, the hotel is located five kilometres from Bole International Airport. The hotel features 188 guestrooms, including 12 suites, two executive suites, one presidential suite and one royal presidential suite with four bedrooms.

Standing at the junction of Africa Avenue and Jomo Kenyatta Street near Mesqel Square, the construction of the hotel took over 13 years to complete. The hotel has meeting facilities that boast 1,700Sqm. It also has recreational facilities including a fitness area with spa and manicure salon facilities, a 400Sqm terrace designed for dining and social events.

Hyatt Regency is the second franchise hotel to be owned by a non-national, aside from Sheraton Addis Hotel, which is owned by Mohammed Hussein Al Amoudi. The owner, Albwardy Investment, is a Dubai-based company that operates a total of 30 companies globally including food distribution, logistics, marine engineering, construction, insurance, polo sports and hospitality.

Albwardy, which owns Hyatt Regency in Dar es Salaam, Tanzania, 13 other countries in Africa and across the world, invested 25 million dollars in acquiring the two hotels from M.A. Kharafi & Sons Plc in 2013. When Albwardy acquired the two properties they were still under construction and overseen by the consultancy firm of Zemedeneh Negatu.

The former owners of M.A Kharafi & Sons Plc originally planned to build two hotels: a three-star hotel, Ibis; and a four-star hotel, Novotel, under the French Accor Hotel brand. Albwardy combined the two properties and created the five-star Hyatt Hotel.

Hilton Addis pioneered the franchise hotel era in Ethiopia during the reign of Emperor Haile Selassie. Sheraton joined Hilton in the late 1990s, followed by Radisson Blu. Other entrants into the market are Golden Tulip, Marriott Executive Apartment, Ramada and Best Western Addis that are currently operating in the capital.

Experts in the hospitality industry applaud the entry of Hyatt in the capital.

As a global brand the franchise can potentially attract more clients and tourists into the country, according to Ayalew Sisay (PhD), a tourism management lecturer at St. Mary’s University.

“Addis Abeba is becoming a destination of international and regional conferences. Thus, it can serve as one of the venues for these events,” Ayalew said.

Last fiscal year, a total of 933,000 tourists visited the country, generating 3.5 billion dollars in foreign currency. Addis Abeba is ranked as one of the top ten host African countries and held over 17 international meetings in 2017.

“Knowledge, technology transfer and job opportunities are additional benefits derived from the presence of international hotels,” Ayalew told Fortune.

 

Court Grants Prosecutors Two Weeks to Charge MetEC Officials

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Judges at the Federal High Court gave prosecutors two-weeks press charges against 11 senior officials from the state military conglomerate Metals & Engineering Corporation (MetEC), who have been detained under suspicion of grand corruption.

During the court session held on Thursday, December 27, 2018, investigators from the Federal Police reported that they have completed their investigations and transferred the cases to federal prosecutors, who are expected to press charges against the suspects in 15 days.

Arrested during the first week of November, the 26 MetEC officials are suspected of grand corruption involving illegal local and international procurements. Police have taken almost two months to finalise the probe requesting three custody extensions from the court.

Tena Kurunde (Brig. Gen) and Hadgu Gebreghiorghis (Birg. Gen), both deputy directors; and, Mulu W. Gebriel (Col.) and Tekeste Hailemariam (Col.), both former deputy directors, are among the suspects.

Azeb Tadesse (Col.), head of corporate marketing; Asmeret Kidane, (Lut. Col), former representative of Gafat Armament Engineering; and Birhan Beyene (Birg. Gen), director of audit and inspection, are included in the suspect list.

The prosecutors’ two-page preliminary claim focuses on four procurements, alleging that the suspects caused 826 million Br in losses to the public treasure by illegal procurements of two shipping vessels, the Rivera Hotel, a plastics factory, the Imperial Hotel and raw material.

Eight of the suspects were accused of causing a 545 million Br loss to the public treasury in the illegal procurement of two shipping vessels by MetEC from the Ethiopian Shipping & Logistics Services Enterprise. The prosecutors claim that the suspects obliged the Corporation to procure the vessels leading to the expenditure of additional public funds in expenses including on maintenance and administrative costs.

The acquisition of Rivera Hotel and a plastics factory for 202.8 million Br, without proper procurement procedures, are leveled against one of the suspects by the prosecutors. The purchase of another hotel, Imperial, for 72 million Br is the third count on a third suspect, who is also accused of alleged illegal procurement of the shipping vessels.

Another claim is leveled against an official suspected of improperly ordering raw material for 5.9 million Br.

The two prosecutors – Fetihu Nure and Yosef Samuel – claim that they are organizing charges under three files and requested the court grant additional time to file the charges.

The suspects, most of them joined by their legal representatives and public defenders, appealed for bail, listing their illnesses, which they claim require constant medical attention, and their responsibility for large families.

The three judges of the 10th Criminal Bench, Christian Baylegne, Lemma Tuji and Genanaw Assefa, rejected their bail and granted the requested 15-day extension by prosecutors and adjourned the case to January 13, 2019.

Cases of Kinfe Dagnew (Maj. Gen.), the Corporation’s former CEO, and another 15 suspects are still pending, and the suspects are under custody by the police and subject to investigations. Kinfe, who is suspected of 19 different counts, will appear in court this week.

Abyssinia Bank Exec Joins Fintech Firm

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Premium Switch Solutions (PSS), the electronic solutions share company that operates the electronic payment systems of six banks acquired Yoseph Kibret, former chief information system officer of Abyssinia Bank, as its new CEO, effective January 1, 2019.

Before joining Abyssinia four years ago, Yoseph, who has a quarter century of experience in the financial sector, worked at Nib and Dashen banks. An information systems director while at Nib, he held various positions at Dashen.

He began his career at the Central Statistical Agency, participating in the 2007 national census, and was engaged in 25 national surveys before leaving the Agency after half a decade of service.

“We chose him given his ample knowledge and experience in the industry and technology,” says Tsehay Shiferaw, chairperson of Premium’s board and president of Awash Bank.

Following Yoseph’s departure from Abyssinia, Daniel Hailu, formerly the vice president of Commercial Bank of Ethiopia’s Enterprise Program Management Office, was hired as chief information system officer.

Abyssinia also appointed the former vice president of Commercial Bank for internal service, Meseret Asfaw, as its chief enterprise services officer, replacing Demissew Abebe, who left the company two months ago.

“I left Abyssinia of my own will,” Yoseph, married and a father of four, told Fortune.

An enthusiast of the works of John Maxwell on leadership and Daniel Goleman on emotional intelligence, Yoseph has first degrees in statistics and accounting and a master’s of science in computer science.

He replaced Moges Geleta, CEO of PSS since its inception in 2012. Moges resigned last September due to personal reasons, when Dawit Tefera, his deputy, took over as acting CEO.

It is during Moges’ time that PSS grew from integrating three banks to its current six. The firm was able to transact 7.1 billion Br last fiscal year, registering over 4.8 million individual transactions.

The first payment switch company with 146 million Br in capital and operating over 700 automated teller machines, PSS offers card personalisation, bank integration and transaction services.

“We are working on a strategic plan for the next five years,” Tsehay told Fortune. “We will sit down with the CEO and discuss how we can make the company a centre of fintech excellence.”

Yoseph agrees.

“I want to see PSS introduce new technology-based services to the industry,” Yoseph told Fortune.

Last month, Eth-switch, a consortium of 17 banks established to integrate the national electronic payment system, also appointed a new CEO, Yilebes Addis. Before joining Eth-Switch, Yilebes was the chief information officer of Kifiya Financial Technology.

Moges did not respond to text and phone inquiries of Fortune.

 

Yoseph Kibret, the CEO of PSS.

Grow or Give Up Licenses: Bureau to Small Businesses

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The City Small & Micro Enterprises Development Bureau is drafting a directive to compel small and micro-enterprises (SMEs) to upgrade themselves to medium level after five years of programme participation.

The Bureau has been working on three different directives that focus on three areas – upgrading enterprises, creating market linkages and formation and registration of the enterprises.

The draft directive, in preparation for almost a year, states that enterprises that fail to upgrade themselves in five years will see their licenses revoked. The Bureau will grant a three-month grace period at the expiration of their participation to allow companies to upgrade.

The process of achieving medium-level involves three certification stages.

The directive is the result of observations by the city administration that many of the 30,000 companies spread across different sectors are disinterested in upgrading themselves, preferring to stay in a programme that offers them privileges and assistance as SMEs, according to Awol Mohamed, director of Enterprise Transformation & Support at the Bureau.

“Many enterprises have failed to upgrade themselves, some for over a decade,” said Awol.

The new directive defines micro enterprises as those that employ at least five employees with a capitalization of 100,000 Br for industries, and 50,000 Br for service providers. Small enterprises are categorized as those who employ six to 30 workers and are capitalized with up to 1.5 million Br for industries, and 500,000 Br for service providers.

“We are not accepting new applicants as the existing SMEs are not leaving their spots in the programme,” said Awol.

Since the launch of the city’s micro, small and medium-enterprise classification system in 2010, over 30,000 enterprises have registered. However, only about 1,500, or four percent of the businesses, have graduated to the medium-enterprise level.

The cause for these low results is attributed to fears that the benefits and incentives the city programme offers businesses will be cut off, according to Awol.

These benefits and incentives include provisions for workplaces, procurement of raw materials, loans and other support.

The assistance the Bureau has been providing was not sufficient, according to Molalegne Baye, communications director at the Bureau.

The enterprises will find markets through outsourcing, outgrowing, franchising and subcontracting.

“The existing supports for the enterprises are not encouraging and making the businesses competitive,” said Molalegne.

Creating a market linkage with governmental and non-governmental organisations, individual entrepreneurs and other businesses through telemarketing, e-commerce and bazaar and exhibition showcases are among the plans of the Bureau under the new directive.

“In previous time our mandate was to organise new enterprises rather than creating market linkages,” said Nebiyu Wudnehe, director of Job Creation at the Bureau.

For businesses that engage in the construction industry, the Bureau will create market linkages worth 10 million Br, according to the new directive. It is also expected to create market linkages worth 1.2 million Br for those engaged in services and urban agriculture. Small enterprises engaged in manufacturing will get market linkages worth 670,000 Br through the Bureau.

Jemal Abagigissa (PhD), a lecturer at Addis Abeba University for over a quarter of a century and the current head of the Department of Management & Public Administration, cheers the move made by the Bureau.

“Many SMEs get into a comfort zone with the supports they get and don’t want to grow,” said Jemal. “But the license of the businesses should be revoked if the bureau has given all the necessary support to the businesses.”

Jemal also suggests a concerted effort should be taken by the government and the SMEs to make sure that these enterprises achieve their goal in creating an industrialised Ethiopia.

Board Creates Data Centre for Financial Info

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The Accounting & Audit Board of Ethiopia (AABE) invested five million Birr to build a data centre that will store information on companies that report to the 12-member Board. The new data centre is located at AABE headquarters in Sidist Kilo, and its goals are to store and transfer information smoothly, according to Abebe Shiferaw, communications director for the Board.

The centre was developed by a local IT company, InteraCom IT Solutions, which was established in 2005 and engages in developing IT infrastructure. The company operates with 25 employees and has worked on data centres and network infrastructure for the Agricultural Transformation Agency, Addis Abeba University, Ambo Mineral Water S.C. and Ethiopian Insurance Corporation.

The project was launched in July 2018 and was expected to go fully operational after one month.

InteraCom, which operates with 25 employees, built the data centre at the headquarters of the AABE.

The new centre, which will store and distribute all the data on the internet, has three storage servers, each with storage capacities of 6.6 terabits of data. It has switches to connect users to the servers and storage. Distributors, an air conditioning system and uninterrupted power supply systems are all new features of the project.

A total of 18,000 companies including share companies, state-owned enterprises, private limited companies and small and micro enterprises report to the board, which was formed by a 2014 parliamentary legislation as part of a financial proclamation.

The board has been storing data and reports of companies in hard copies and in an old data centre located at the Ministry of Science & Innovation.

“Most of our rooms are filled with hard copies,” said Abebe. “The old data centre could not store the external files as it is only used for in-house purposes.”

Due to lack of data centre facilities, the board was also facing operational challenges on its website, according to Samuel Asrat, director of IT at the Board. The federal government has given the Board a mandate to transform the financial reporting system of the nation.

“Our website is not working properly as a result of lack of properly managed and functional data centres,” said Samuel.

Girum Terefe, operations manager at InteraCom IT Solution said the migration of data and document was challenging.

“We faced some network interruptions while migrating the data from the old network,” Girum told Fortune.

“The data centre will also help the people to register online and access the system virtually from anywhere,” Samuel said.

The board is also working to launch a digital library for students and researchers who need data on the financial sector. It will also add information on the website about the International Financial Reporting System.

Wubete Nigusse, an expert in computer applications and a lecturer at Kotebe Metropolitan University with a decade of experience, believes the board has made a good move in having the data centre but believes that it is a late action.

“Considering the responsibility of the board, which is finance, all the data to be stored at the Board needs to be accurate and neat,” Wubete said.

Belcash to Launch Online Commerce Platforms

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Two e-commerce platforms, which will enable online commerce locally as well as allow buyers outside the country to transact in goods available domestically, are set to be launched by Belcash Ethiopia.

Hellomarket will be the platform used for local transactions, enabling buyers to order, deliver and pay for goods through electronic banking services. Belcash has signed an agreement with DHL Express, a Germany company, for logistics services.

For buyers abroad, Belcash introduced Helloshop, a platform that allows domestic products to be ordered through the firm’s portal and the payment to be processed through Mastercard Payment Gateway Services.

“This will make foreign currency flow through the proper channels to local banks,” said Zewdu Assefa, deputy CEO of Belcash Ethiopia. “The seller receives the Birr equivalent of the amount earned in foreign currency.”

The goods Belcash is showcasing include value-added leather, textile, coffee and other dry edible and cultural products.

The price, picture and specification of the products will be uploaded on the portals by Belcash with a plan to provide warehouses with the aim of monitoring the quality and quantity of goods.

Belcash Ethiopia, a subsidiary of Netherlands-based Belcash Technology Solutions, was established in 2011. It currently is working with Lion International Bank, Cooperative Bank of Oromia, Wegagen Bank and Somali Micro Finance Institution to launch a pilot project this week.

For the pilot project, it entered a partnership with SNV, a Dutch development firm established in 1965, and SIDA, a Swedish non-profit organisation.

Belcash plans to register goods produced by 2,500 women-owned businesses on Hellomarket and Heloshop platforms. The women are part of SNV’s Livelihood Improvement for Women & Youth project.

Currently, 40 women from the group have received training by Belcash on how to grow brands and package products. They were also given awareness training on digital platforms.

An expert on ICT at the Addis Abeba University for more than one and half decades appreciates that such a platform has been realised as it creates more market exposure for micro-enterprises.

“In parallel to the platform, people in micro-enterprises should be trained to utilise different websites and other e-system alternatives to develop their businesses and enter markets on their own,” said Mesfin Fikre (PhD).

Lack of an e-payment system, together with regressive policies and regulations for financial inclusion, are the main reasons for the lack of financial technology’s growth in Ethiopia, according to Zewdu.

Nib Pays Private Industry Record Claim

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Nib Insurance Company, one of 17 private insurance firms, paid out record high claims in the private industry during the last fiscal year.

The firm registered 308 million Br in claims in the last fiscal year, a 23pc increase.

In the reporting period, Nib’s competitor United reported 232 million Br; Awash, 284 million; and Nyala, 163 million Br in loss payments.

“As an insurer, we must relieve our clients from risks,” Zufan Abebe, the CEO of Nib told Fortune. “Nib paid clients with genuine claims.”

Claim payments included 184.5 million Br for motor insurance, which reflected over half of the insurer’s claims.

Abdulmenan Mohammed, a financial expert with over 15 years of experience, cautioned that the firm should give extra attention to claims.

“Nib should keep an eye on claims expenses,” Abdulmenan said.

The bond insurance that was outstanding for over five years is the main reason for the surge, according to Zufan.

Though the firm’s claims were high, Nib managed to increase its interest income by 11pc and recorded a net profit of 62 million Br. Shareholders return also rose to 124 Br per share, an 8.7pc increase from two year ago.

Zufan attributed the increase in premium underwriting as the significant reason that contributed positively to profit results.

In the fiscal year, Nib generated 478 million Br in premiums, a 14pc increase from its report two years ago. While ceding 93.1 million Br to reinsurers, the company retained 80.5pc of premiums, higher than the industry average of 77pc.

“As we took measures on contractor’s bond insurance, we were able to retain a higher share of the premiums,” the CEO says.

Nib also earned a decent income from commissions and investments, which stood at 26.19 million Br and 93.2 million Br, respectively.

It also owns 142.5 million Br in shares of Nib Bank, Ethio Reinsurance and Zhemar Hulegeb Industries; and other holdings in bank deposits and governments bonds that brought total of investment assets to 899.3 million Br.

A reasonable rise in expenses accompanied the income increase. Operational costs for Nib increased by 6.3pc to 102 million Br, while commission fees paid for independent insurance brokers and its 135 in-house sales agents stood at 31.6 million Br. About 1.5 million Br was also spent on training its staff of 416.

“The management of Nib should be appreciated for controlling expenses,” said Abdulmenan.

In the past fiscal year, Nib opened two branches and one contact office. It also finalised the construction of a 132-million-Br building in Dire Dawa.

Last year was also a year when Nib introduced political uncertainty insurance policies, which were well received by clients, according to Zufan.

“The industry needs to work on competing by introducing new services, not by price cutting,” said Zufan.

Though the company had a relatively successful year, it was not without challenges, according to Berhanu W. Giorgis, board chairperson of the firm.

The company’s performance has been challenged with internal and external factors, according to Berhanu.

Nib faced challenges in rising rent fees, staff turnover, price-based competition and the nation’s unrest, he said.

During the annual meeting, the shareholders agreed to double the capital. Established 16 years ago with 14 million Br in paid-up capital, Nib’s assets and paid-up capital reached 1.3 billion Br and 250 million Br, respectively.