Saturday, April 20, 2024
NewsCity moves to formalize Edir associations

City moves to formalize Edir associations

A new directive from the Addis Ababa City Administration marks the first state attempt at formalizing Edir, a traditional social funeral insurance system, which officials want to see transformed into an organized social enterprise.

Approved by Woineshet Zerihun, head of the City Women, Children, and Social Affairs Bureau, the directive looks to set a legal basis for forging Edir into an alternative source of finance for social development projects.

Edir works like any other insurance product, whereby participants, usually grouped by neighborhood, regularly pay fees (or premiums) to a collective fund that will be used to cover funeral expenses for its members.

Some Edir associations in more affluent neighborhoods of Addis Ababa manage substantial amounts of money, which can also be invested.

The directive sets out to encourage saving and investment, and promote engagement in income-generating businesses.

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It obliges all Edir associations, existing or new, to register with the Bureau for certification, and limits the number of Edir councils to one at the woreda, sub-city, and city levels. The associations are also required to submit periodical audit reports to the Bureau.

The directive enables Edir associations to own property, enter into legal contracts, endows them with legal liability, and makes them beholden to the Commercial Code.

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