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A Microfinance Declared Bankruptcy, Failing to Meet Capital Requirement

Aug 5 , 2025

A microfinance enterprises operational since 2004 in Dila, South Ethiopia Regional State, has been declared bankrupt due to non-compliance with the minimum paid-up capital requirement. One Microfinance Institute has failed to meet the 10 million Br threshold mandated by the National Bank of Ethiopia (NBE) appilicable since 2015, with a deadline of June 2021.

Citing persistent non-compliance, regulators at the NBE revoked One Microfinance's license on March 12, 2025, and initiated receivership. The NBE has assumed administrative responsibilities for a six-month period to protect the interests of depositors and lenders. It is currently liquidating the institution's assets as part of the resolution process. The Deposit Insurance Fund is anticipated to reimburse eligible depositors.

It is important to note that the minimum capital requirement for microfinance institutions was subsequently increased to 75 million Br through a 2023 amendment to the Micro-Financing Business directive.

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