Gedaa Bank, still under formation, has started selling shares after getting approval from the National Bank of Ethiopia (NBE).

Gedaa offered the shares for a public subscription three weeks ago and has sold 50 million Br worth of shares as of last weekend. Gedaa, which aims to raise half a billion Birr in the next six to nine months, has a subscription capital of two billion Birr.

The bank set 20 shares as the minimum amount of shares a buyer can purchase and 100,000 Br as the maximum subscription value. The shares have a par value of 1,000 Br.

Initiated last February by 17 promoters with different backgrounds in banking, university lecturers, lawyers, business persons, investment consultants, representatives from the Geda system and farmers, the Bank has opened an office inside Oromia Building in front of Bole Medhanialem Church.

It has also opened accounts at the Commercial Bank of Ethiopia, Awash International Bank, Cooperative Bank of Oromia and Oromia International Bank, where interested buyers can deposit their purchase amounts.

While buying shares, the shareholders have to deposit 25pc of the total value they bought and pay the balance within a year after the bank becomes operational. The shareholders are also supposed to pay five percent in advance as a promoters' fee.

One of the priorities of the Bank is allocating share to farmers, according to Wasihun Amenu, board chairperson of the bank, which is named after the traditional social stratification system of people from Oromia Regional State.

"Displaced farmers have not been able to use their compensation wisely and have failed to provide for their families after their relocation," Wasihun said.

NBE has provided the company with a pre-establishment license following Gedaa's application, which included depositing the fully subscribed share minimum of 75 million Br from founding shareholders, minutes from the founding shareholders' general meeting, a list of the elected board of directors and the approved articles and memorandum of association.

Once the Bank reaches the initial paid-up capital, half a billion Birr, the bank will secure a license and will get a commencement letter from NBE. The regulatory bank will then conduct a field inspection and proclaim that the new bank is ready for operation.

If it gets an approval from the central bank, Gedaa will be the 19th bank in the country and the 17th private commercial bank.

The Bank is attempting to join an industry that has seen a 23.6pc spike in deposit mobilisation in the last fiscal year and disbursement of 115.4 billion Br in new loans, which is a 5.9pc growth from the preceding year.