Commentaries | Mar 05,2022
July 13 , 2020
By SEBLE WONDEMAGEGN ( FORTUNE STAFF WRITER )
Hijra Bank S.C., a new full-fledged, interest-free bank (IFP), has reached the final stage of under-formation status with an initial paid-up capital close to 700 million Br.
The under-formation bank stands one step away from joining the industry, only awaiting a green light from the National Bank of Ethiopia (NBE), which lately posted the list of shareholders in the state-owned Ethiopian Herald newspaper without objection. Hijra raised the paid-up capital, which is 200 million Br higher than the minimum requirement set by the governing bank, from over 9,000 shareholders.
Hijra, which now has 13 promoters from the fields of academia, law, ICT, finance and business, officially started selling shares on July 22, 2019, after getting pre-formation licenses from the NBE on June 20, 2019. With a par value of 1,000 Br, the Bank has sold 1.2 million shares, 500 million Br of which is designated as subscribed but not paid-up capital at the present time. The promoters filed all the necessary documents to the central bank last month.
Incepted by nine promoters, the Bank has been selling shares through 12 banks in the country, all except Enat Bank, Debub Global, Zemen and Berhan banks. Hijra limited buyers to a maximum of 20,000 shares worth 20 million Br and a minimum number of 30 shares with a value of 30,000 Br.
“We're now at the final stage,” said Mukemil Bedru, chairperson of the under-formation Hijra Bank. Mukemil has been a lecturer at Addis Abeba University’s College of Business & Economics for more than a decade. He has also served in a managerial position at Deloitte, a global consulting firm.
The promoters expect to get the full licenses from NBE within three weeks and plan to place the head office of the Bank in the capital, according to Mukemil.
Upon completion of the under-formation process, Hijira will be the second full-fledged, interest-free bank to join the industry along with ZemZem Bank, which is expected to commence operations soon as well. A couple more banks, including Zad, Nejashi Kush and Huda, have also initiated a process to organise full-fledged, interest-free banks.
Currently, there're close to a dozen different kinds of banks that are in the process of formation and currently availing shares for public subscription including Goh Mortgage, Selam, Sheger, Ahadu and Medre Geez.
“We expect to be operational starting from the coming Ethiopian New Year,” said Mukemil.
The Bank has so far hired 10 permanent and up to 60 temporary employees. It plans to push the number to 500 employees when it becomes fully operational.
Currently, there are 18 operational banks in the country with over 5,564 branches as of the end of last year. During the year the banks increased their deposit mobilisation by 23.2pc, loan collection by 18.1pc and loan disbursement by 42.5 percent.
Habib Mohammed, an expert in the banking sector, believes that nowadays full-fledged, interest-free banks are fully emerging by introducing customers to new risk-sharing products that previously were not common in the market.
“Hijra should be creative in terms of mobilising deposits,” said Habib. “If it comes out with a new product, it can easily attract the Muslim community, as well as the whole country at a larger level."
Habib recommends the Bank offer businesses new technological core banking solutions. By avoiding the contamination of funds, the Bank can entice the community that is in need of IFB services, according to him.
PUBLISHED ON Jul 13,2020 [ VOL 21 , NO 1055]
Commentaries | Mar 05,2022
Fortune News | Aug 27,2022
Radar | Mar 21,2020
Fortune News | Sep 27,2020
Fortune News | Jun 15,2019
Fortune News | Dec 05,2020
Fortune News | May 23,2021
Fortune News | Oct 19,2019
Fortune News | Aug 28,2021
Radar | Sep 27,2020
July 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
November 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
November 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
October 16 , 2021 . By HAWI DADHI
Residing in a country with no capital market, an organised marketplace for trading se...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
October 1 , 2022
The foreign exchange market is seeing a war of attrition, with the Dollar gradually t...
September 24 , 2022
Look no further than the flower industry to appreciate the importance of the European...
September 17 , 2022
The debate shortly after the Council of Ministers nodded a bill to open the financial...
September 10 , 2022
Ethiopia's policymakers and wonks began planning the economy and directing its course...
PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize
May 6 , 2019
There is the view that women should either have to shave off a couple of years (or a decade) from their age or not say at all how old they a...
Or see contact page