Fortune News | Sep 08,2019
Neway Magersa (Left), president of Sinqee Bank, shared a lighter moment at the Skylight Hotel on Africa Avenue and chuckled with Oromia Regional State senior official Addisu Arega and Ethio telecom's Chief Executive Officer (CEO), Frehiwot Tamiru. The easy banter masked the scale of the task ahead, turning billions of Birr into millions of new customers, and proving that digital lending can reach corners of Ethiopia that conventional banking has missed.
The nonchalant moment on April 27 marked a day otherwise devoted to hard numbers and ambitious plans. Sinqee Bank and Ethio telecom signed a 15 billion Br agreement to roll out “Wabii Digital Finance,” a lending platform that blends Sinqee’s balance-sheet muscle with Ethio telecom’s nationwide digital network. The partners said they spent a year hammering out terms that will steer 10 billion Br to small- and medium-size enterprises, four billion Birr to finance smartphones and other devices, and 1.3 billion Br to micro-credit.
Borrowers can seek unsecured loans of up to 130,000 Br or pledge collateral for facilities as large as 1.2 million Br. Personal loans range from 5,000 to 30,000 Br and can be repaid in as little as five days or as long as 45 days. Salary-based credit tops out at one million Birr and is earmarked for roughly 500,000 employees, while device financing offers up to 30,000 Br with a 20pc facilitation fee. “Digital financing needs capital, and now we are doing it,” said Neway, after outlining Sinqee’s own metrics: 11.6 billion Br in capital, 44.7 billion Br in outstanding loans and 97.4 billion Br in total assets. The Bank, incorporated in 1999, counts more than 528,000 borrowers across 574 branches.
Frehiwot disclosed that Ethio telecom had spoken with other lenders, but Sinqee was the first to seal a deal. The state-owned operator has already distributed 900,000 handsets in the past nine months and plans to ship two million more under the new program. The companies say the initiative will speed up payments, tighten security, and expand credit to rural and unbanked customers. Automated and data-driven underwriting seeks to cut fraud and funnel working capital to small firms that have long struggled to secure bank loans.
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