The minimum paid-up capital of micro finance institutions is up by six-fold to 75 million Br effective mid-last week. Regulators at the central bank said the amendment was proposed a year to empower depositors. According to Fikadu Digafe, vice governor of the National Bank of Ethiopia (NBE), only 15 micro finance institutions out of 52 obtained licences fulfilling the requirements. Micro finance institutions share subscriptions and submit their business license application to obtain licenses and must present a statement showing they reached a 10 million Br paid-up capital. Institutions are expected to meet the minimum capital threshold until January 2028, while newly established ones will have seven years to comply. However, they should present an action plan to the central bank three months after approval. According to the National Bank of Ethiopia, the micro finance sector mobilises 28.3 billion Br as a deposit, last year. In August 2020, the central bank green lighted micro finance institutions to turn into full-fledged banks. Even though they are elevated to the banking level, they must continue providing micro finance services. Rays and Somali micro finance, Addis, Oromia and Amhara credit & savings are among the institutions added to the commercial banks league in the past two years.
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