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 Hikes Service Fees for Foreign Investors in Free Trade Zones

The Ethiopian Investment Board has issued a new directive revising the service fees from foreign investors payable in dollars to the Ethiopian Investment Commission (EIC), introducing updated rates for both the One Stop Shop and designated Free Trade Zones. The revised directive came into effect this April following its publication on the websites of the Ministry of Justice and the EIC. Issued pursuant to Article 23 of the Special Economic Zone Proclamation, the directive outlines charges for...


Radar

City Tables 350B Br Budget Plan for Upcoming Fiscal Year

The City Administration has approved a resolution to submit a proposed budget of 350 billion Br for the 2025/26 fiscal year to the City Council for deliberation. According to the Administration's statement on its official social media page, the draft budget is designed with a central focus on poverty reduction, encompassing targeted subsidies for sustainable development, investment in large-scale job-creating projects, and enhanced service delivery to address the growing demands of the reside...


Radar

Ethiopia, UN Launch Joint Plan to Drive Development Through 2030

The Ethiopian government and the United Nations (UN) have signed a five-year development plan outlining national priorities from 2025 to 2030. Signed on June 20 at the Ministry of Finance, the United Nations Sustainable Development Cooperation Framework (UNSDCF) with implications that it aligns with Ethiopia's reform goals and the Sustainable Development Agenda. The plan is backed by a projected 6.5 billion dollars, though only 1.5 billion dollars is currently secured. It focuses on closing t...