Aug 21 , 2023
The microfinance institution Addis Credit & Saving Institution S.C. edges closer to joining the banking industry under the moniker Siket Bank. It received a nod from regulators of the central bank last week, making it the seventh microfinance institution to become a full-fledged bank. The microfinance was established 23 years ago with an initial capital of half a million Birr from six shareholders. As it nears graduation into a bank, Siket is boasting a 5.9 billion Br capital, 12.3 billion Br assets and a gross profit of 1.3 billion Br through its 552,000 customer base. Damtew Alemayehu, president of Siket indicated that they have been working on several reforms, including enhancing its capacity through data centre and employee training. "The institution aims to serve those seeking microfinance service as well as banking", he said. The evolvement of the banking industry has reached 32 including the new entrant operating in close to 11,861 branches. The financial institutions including micro finances mobilised 2.2 trillion Br deposits while total loan disbursements grew by 28pc from the previous year to 248 billion Br. While Governor Mamo Mihretu lauded that the figure holds promise, he indicated that the banks' technological capability remains inadequate while there is a significant lag in financial inclusion with only 376,000 people in a country of 120 million having access to loans. Mamo urged banks to strive for growth and resilience as liberalization of the financial sector and entry of foreign financial giants edges closer. "The stakes are higher than ever for the financial institutions," he said.
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