Sidama Bank, a third-generation financial firm, is hiring a technology company to acquire CORE banking solutions, an automated financial management system in the banking industry.

It initiated the bidding process to acquire the system four months ago.

Initially registered as Sidama Microfinance Institution S.C., regulators at the central bank have granted its executives a commercial banking permit for it to transition into Sidama Bank. It is among several microfinance institutions that have made the evolution. Oromia Credit & Savings S.C. became Siinqee Bank, and Amhara Credit & Savings was established as Tsedey Bank.

Somali Microfinance, now Shebelle Bank, Omo Microfinance, and Addis Credit & Savings institutions have jumped into the banking business as fully-fledged commercial banks. Absent Amhara, Oromia and Somali microfinance institutions, the size of this segment of the finance sector has drastically declined. Their number dropped to 37, savings deposits by 44.6pc and total assets by 43.1pc by the third quarter of the past financial year.

Established 25 years ago with a registered capital of 200,000 Br, Sidama Microfinance Institution started as the Sidama Rural Women's Credit & Saving Scheme in 1994 before becoming a full-fledged microfinance institution (MFI) four years later. It has raised 1.45 billion Br in subscribed capital from 2,000 shareholders, 575 million Br of which is paid up. It will have six years to raise its paid-up capital to five billion Birr to meet the central bank's minimum capital threshold.

The Bank has applied for operational licenses for which appointing a chief executive officer is among the requirements. It has nominated Tadesse Hatiya, a former board member of Debo Microfinance Institution, as the founding president. Tadesse has served as a vice president for operations at the Berhan Bank. Serving in the banking industry for over a decade, Tadesse graduated from the Addis Abeba University in economics and shortly joined the Comercial Bank of Ethiopia (CBE) as a junior marketing officer.