Fortune News | Aug 14,2021
Addis Abeba’s Mayor, Adanech Abiebie, was given a tour of the headquarters of Goh Mortgage Bank as it opened its doors last Monday by Mulugeta Asmare (centre) and Gebreyesus Egata (right), president and board member, respectively. On Zimbabwe Street (off Bole Road around an area known as Japan), Goh has been on a two-year journey to house itself in this building since its inception.
The promoters of the Bank and the Mayor took turns speaking on the chronic housing shortage in Addis Abeba. Driven by inflation, the property market is soaring, compelling the city administration to freeze the increase on rent and ban the evictions of tenants for three months. Goh, which received its operating license in August, and raised a subscribed capital of 1.2 billion Br, also chipped in 1.5 million Br to the city’s housing renovation initiative for low-income families.
The Bank is the lone mortgage bank in a country where demand for housing far outstrips supply, especially as the population grows and economic migrants from rural areas make cities ever denser. While commercial banks offer short-term mortgage loans, the interest rate and repayment period are out of range for most Ethiopians. The Addis Abeba City Administration's plans to provide condominium housing have faltered in the face of delays, cost overruns and controversies.
Goh’s only competitor would have been Selam Bank, an initiative under formation but facing an uphill struggle as the deadline to raise half a billion Birr, the minimum paid-up capital requirement to open a bank, has passed. Selam now needs to raise five billion Birr to get its foot in the door and compete with Goh. It can potentially go for a merger with other banks, though none have plans to specialise in mortgage banking.
PUBLISHED ON
Oct 30,2021 [ VOL
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