Thursday, July 25, 2024
BusinessFinancial institutions, professionals birth excellence center

Financial institutions, professionals birth excellence center

Several financial institutions and industry experts have pooled capital to form the Capital Financial Excellence Center (CaFEC) Share Company, a new firm working in capacity building. To establish the Center, banks, insurance companies, and renowned industry professionals shelled out 61.6 million birr.

The Center, which is the first of its kind, is intended to train professionals, conduct research, provide consulting services, and strengthen Ethiopia’s financial sector.

Nine banks, including the state-owned Commercial Bank of Ethiopia (CBE), nine insurance companies, two finance-related associations, a microfinance institution, and several former and current Chief Executive Officers (CEOs) of financial institutions are among the founding shareholders.

The CBE, Wegagen, Buna, Nib, Awash, Dashin, Debub Global, Addis, and Goh are shareholder banks, while Africa, Nyala, Nile, Buna, Nib, Lucy, Abay, Awash, and Tsehay are among the insurers.

Dereje Zenebe, Asfaw Alemu, Tsehaye Shiferaw, Aklilu Wubet, Genene Ruga, and Tesfaye Boru are among the shareholders who serve as chief executive officers of multiple banks.

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The Center will be another company owned by financial institutions in the country, albeit it will be the first financial excellence center of its kind. This is the first collaboration since all banks in the country established the national switch operator, EthSwitch S.C.

The institute is licensed by the Ministry of Trade and Regional Integration and is regulated as any other business that is not a financial service provider, according to the founding individuals.

“We will provide consultancy services and finance-related short-term trainings. We are not regulated by either the National Bank of Ethiopia (NBE) or the Ministry of Education,” said Getahun Nana, the founding CEO of the Center and one of the shareholders.

Getahun was one of the individuals responsible for establishing Goh Betoch Bank and currently serves as the bank’s board chairman. He formerly served as vice governor of the NBE and president of the Development Bank of Ethiopia (DBE).

About 56 percent of the 61.6 million birr of the subscribed capital by financial institutions and professionals is paid up. Over 92 percent of the capital was contributed by financial institutions, while the remainder was made by individual shareholders with extensive industry experience.

The governor of NBE, Mamo Mihretu, pledged government assistance to the Center during its inauguration ceremony at the Hilton Addis Hotel on March 23, 2023.

He hoped that the organization’s services would “play a pivotal role in enhancing the human capital the industry requires.” He recalled reforms by the NBE that required banks to allocate two percent of their annual regular expenses to enhance the capacity of their human resources.

“Compared to other countries, our financial sector has a long way to go in relation to human resource capacity and use of technology,” he said.

During the ceremony at the Hilton Hotel, the Center announced that more than 100 professionals in the country and abroad have already agreed to collaborate.

Getahun believes that the sector is not yet ready for foreign competition because it was closed to competition and lags behind other countries’ developments in the sector.

“The main problem is that there is not enough human capital to go with the change that is coming, so our main goal is to make the human resource available for the change,” Getahun said, adding it should have been established long ago.

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