Central Bank Allows Microfinance Institutions to Evolve into Banks

Aug 22 , 2020


[ssba-buttons]

The National Bank of Ethiopia (NBE), in a directive issued last week, has allowed microfinance institutions to upgrade into full-fledged banks. The directive lays out the criteria for which microfinance institutions are eligible for this transition. Accordingly, microfinance institutions with a strong financial footing and with regional governments or city administrations as shareholders, which accounts for more than 70pc of the industry, are deemed qualified. It also states that institutions will have a period of two years to finalise their transition into banks. However, a transitioned microfinance institution, while performing the regular services of a bank, must not neglect the main aim of its establishment, according to Yinager Dessie (PhD), governor of the central bank. The institutions must continue to serve and provide loans to the small and medium enterprises and the low-income individuals they were established to serve. Currently, there are 38 microfinance institutions in the country, accounting for 41.6 billion Br in mobilised savings deposits.


Radar

New Directive Tightens Rules for Foreign Employment Agencies

The Ministry of Labour & Skills has issued a directive under the Ethiopian foreign employment framework, setting clear standards for agency size, capital, and operations. Depending on their level, newly established agencies can serve between 10 and over 100 workers a day. Office space requirements range from 100sqm to 700sqm, tied to operational scale. Level-one agencies must hold a paid-up capital of 20 million Br and place a security deposit of 250,000 dollars or its birr equivalent...


Radar

Audit Findings Expose Deepening Gaps in Accountability

A new study reveals that audit irregularities in Ethiopia have continued to rise year after year, driven by weak enforcement and unresolved legacy problems. The finding, commissioned by the Office of the Federal Auditor General (OFAG) and conducted by independent researchers from Addis Abeba University, examined audit reports covering 2009–2023. The study attributes the persistent irregularities to limited accountability, poor follow-up, and reduced audit coverage during political transitio...


Radar

Africa Maritime Conference Sets Sights on Seafaring Innovation

The Ministry of Transport & Logistics has launched the first-ever Africa Maritime Conference, marking a bold move to position landlocked Ethiopia as a continental hub for seafaring innovation at a time of global talent shortages. At a pre-conference briefing, Frans Joubert, CEO of YCF Manning Ltd, underscored Africa's untapped potential in the maritime sector. Of the 1.9 million seafarers worldwide, only four percent are African—despite the continent hosting around 150 maritime academie...