With over 6 billion Birr paid-up capital Amhara Bank, the new entrant to the banking sector of Ethiopia, today held its inaugural meeting.
The promoters stated that 50 percent of the shares are sold in Addis Ababa, while 20 percent is sold in Amhara region. The remaining shares are bought by Ethiopians living in different parts of the country. Over the past two years, Amhara Bank has sold 188,000 shares and tens of thousands of shareholders. In addition to the 6 billion Birr paid-up capital, Amhara Bank has subscribed 8 billion Birr.
Ethnic and political affiliations has been one of the characteristics of private banks in Ethiopia. Out of the 18 private banks including Amhara Bank, almost half of them are affiliated either with a certain ethnic group and a certain group within the ruling coalition.
In addition to the existing banks currently around 18 private banks are under-formation. Some of them are Islamic Banks, the other are ethnic focused such as Gedda Bank and specific area named such as Damota Bank, and Sheger Bank.
The remaining are promoted by Ethiopians in the diaspora holding foreign passports. The involvement of foreign passport holders in banking sector has come recently after the regulatory body, National bank of Ethiopia, has issued a new directive. Ethiopia has also allowed formation of a full-fledged Islamic Bank for the first time with a new directive.
So far the banking industry of Ethiopia is closed to foreign banks. Meanwhile in his latest comment Prime Minister Abiy Ahmed indicated that his administration is ready to welcome a foreign bank as long as it is willing only to provide loan for housing or serve as mortgage lender to help Ethiopia address its critical shortage of housing.