Fortune News | Jun 08,2024
Spring has come, in the form of a commercial bank. Amhara Credit & Saving Institution restarted operations as a full-fledged bank last week with the moniker Tsedey, Amharic for spring. It was a day that put a smile on the faces of [left to right] central bank Governor Yinager Dessie (PhD), who rarely misses bank inauguration events, Agegnehu Teshager, speaker of the House of Federation, and Yilkal Kefale, president of the Amhara Regional State.
Tsedey Bank is one of several micro-finance institutions (MFI) that took the opportunity to transition into a bank following a central bank directive issued two years ago. The other institutions are Oromia Credit & Saving (upgrading to Siinqee Bank), Sidama Microfinance, Somali Microfinance (into Shebelle Bank), Omo Microfinance and Addis Credit & Saving Institution. Absent Amhara, Oromia and Somali microfinance institutions, the size of this segment of the finance sector has drastically declined. Their number dropped to 37, savings deposits by 44.6pc and total assets by 43.1pc during the third quarter of the past financial year.
Tsedey wasted no time meeting central bank requirements to become a commercial bank. A few months after the central bank gave the green light, it reduced the Amhara Regional State's ownership in the financial institution to 70pc to comply with banking laws. It has introduced a logo with a shining sun, similar to the last commercial bank to inaugurate its services, Tsehay Bank, and on-boarded Gedu Andargachew, former Foreign Minister, as founding board chairperson. The new bank joins the industry with 11 billion Br in equity, 71pc paid up, and 46 billion Br in assets.
Its customer base is around 12 million, and employs over 12,300. Unlike most commercial banks, all but 18 of its 148 branches are concentrated outside Addis Abeba.
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