Amhara Savingto go into mainstream Banking
Amhara Credit & Saving Institution (ACSI), a giant microfinance institution active in the Amhara Regional State, has requested the National Bank of Ethiopia (NBE)to be given a green light to transform into a full-fledged banking institution, The Reporter has learnt.
The communication office of the Institution has confirmed to The Reporter that the request was made to the central bank.
ACSI was established back in 1995. In 1997, it was re-established as a share company and was licensed by the National Bank of Ethiopia as a credit and saving institution. Upon establishment, its initial capital was just three million birr. Currently, it managed to expand it to more than 3.8 billion birr. It has also close to 430 branches.
“This is not the first time that we made such a request,” AyalnehMihretu, communication head at ACSI told The Reporter.
Sources from the Central Bank confirmed previous requests made by not only ACSI but also by similar microfinance institutions.
Following their requests, NBE has refused to give permission because those institutions even if they want to be a bank, they also want similar privileges given to them as microfinance intuitions, said a manager at NBE.
The first microfinance institution was established in Tigray Region back in 1994. Currently, there are now 35 microfinance institutions in Ethiopia. The intuitions are estimated to access no less than one million customers, mostly in rural Ethiopia.
As of June 30, 2018, the total capital of all microfinance institutions in Ethiopia has reached 13.77 billion birr whereas total asset increased to 67.26 billion birr.
There are now 18 public and private banks in Ethiopia. As of last year, their total capital has reached around 85.751 billion birr.
The request by ACSI came at a time where the government is expressing its willingness to open up the financial sector to the global market.
As of last week, Yinager Dessie (PhD), governor of the central bank announced that Ethiopia is preparing to open the financial sector.
In his eight month report of the central bank to the parliament, the governor has said studies are being conducted in collaboration with the World Bank. The studies among other things also include:the establishment of a capital market, as well asallowing the Ethiopian Diaspora community to involve in the financial sector.