Promoters of Goh Mortgage Bank have received a letter issued by the National Bank of Ethiopia (NBE), which clears them to conduct shareholders' signing on the memorandum of association and other articles to be held at the Federal Document Authentication & Registration Agency (DARA).

Goh is one of about 20 initiatives raising equity from the public to form a bank. The positive nod from the authorities is a landmark step towards its formation and a crucial requirement for gaining an operational license.

"It was under review for a while, now we've received the green light," said Mulugeta Asmare, appointee president of Goh.

Mulugeta is awaiting official approval from regulators at the central bank.

The document signing process is expected to be completed in two weeks, upon which Goh will submit a request for an operational license from the NBE. Promotors began floating shares to the public two years ago, mobilising 530 million Br in paid-up capital of the 1.2 billion Br subscribed. Shareholders held a founding general assembly in October last year, where they elected Getahun Nana, former vice governor of the National Bank of Ethiopia as board chairman and Mulugeta as chief executive officer.

Mulugeta is a veteran in the banking industry, kicking off his career at the state-owned Commercial Bank of Ethiopia (CBE), where he served in different posts for almost two decades. He graduated from Addis Abeba University in accounting before completing a postgraduate programme in business administration at Greenwich University in the UK. He was appointed as the President of the Bank of Abyssinia in 2015, serving for four years.

In establishing the first private mortgage bank in Ethiopia, Mulugeta and Goh's founders aim to alleviate gaps in the financing of housing development in the country. Once the Bank commences operations, customers will be allowed to take out loans to build, buy and renovate houses. But Goh has yet to make its operational strategy public, although its executives have signalled that they plan to operate with a limited number of branches.

Nevertheless, experts foresee that Goh will face challenges in light of the industry's unique nature and a lack of similar preceding experience. One of the obstacles experts point out is the possibility of a lack of specialised bankers arising from the inexistence of mortgage banking in the country.