The National Bank of Ethiopia (NBE) announces that despite the delays in the process to opening up the financial sector to foreign investors, the major delay have come in light of the understanding of starting a new commerce venture under a clear regulatory framework.
As the central bank underscores, designing a comprehensive strategy to manage the upcoming stiff operation, is mission critical.
Since the government approved a policy early September 2022 to opening up the financial sector, NBE has been engaged on the amendment of the existed proclamation. However, some exports said that the process takes long time against the original projection of finalizing the process.

Solomon Desta, Vice Governor of NBE, who recalled the latest statement of Mamo Esmelealem Mihretu, Governor of NBE, which cited that the draft proclamation will be tabled to parliament in the coming two months, echoed that some delays might be seen but it will be primarily driven by the need to streamline a clear law regarding the opening up of the sector.
“The drafting process has been on the final stage but we have become interested to see the comment and possible inputs from stakeholders and partners on the upcoming proclamation,” he told Capital.
Solomon said that currently NBE is supported by Toronto Centre, East AFRITAC, Africa Training Institute, Tanzanian and Mauritius based IMF wings which have also provided capacity building for its staffs.
“We are working on a framework to undertake comprehensive engagement regarding strengthening the capacity of regulation. We will do preparation and we will work and learn together with those who are joining the market,” the Vice Governor explained.
He added that NBE has drafted the proclamation and invited stockholders like the World Bank, IMF and others to get their view, “Rather than reviewing the proclamation every time we are working to undertake a comprehensive document that shall have a long life.”
Foreign banks that have representative in Ethiopia have got the copy of the draft documents and have been involved on the discussion,“It is crucial for the business so we have distributed the company for international partners and diplomatic missions like the US Embassy.”
“We are working as is supposed. It may seem that the process may suffer delays but the output will be inclusive and comprehensive. If the proclamation is delayed, it is for a good cause on the consideration of quality,” he said.
“We have already accomplished the draft a while back but now we are waiting the view of partners, potential investors and stakeholders in general,” he further explained.
In five year’s time, three to five licenses shall be given to foreign banks he stated, citing, “When the proclamation is amended, we will revisit the directives.”

Digital lending takes a foothold in the loaning business as expansion quadruples in the first nine months of the 2022/23 financial year, in contrast to a year back.
In a second knowledge series titled: ‘Data-Driven MSME Digital Lending for an Inclusive Economy’ that involved financial powerhouses, National Bank of Ethiopia (NBE), International Financial Corporation, FSD-Ethiopia, Kifiya Financial Technology, and the Mastercard Foundation, a series of sessions were held to address the lesson learnt and steps forward to solve the challenges in financing space of micro, small, and medium enterprises (MSMEs) in Ethiopia.
During the knowledge series that was held at Hyatt Regency Hotel on Wednesday May 3, Solomon Desta, Vice Governor of NBE, said that access to credit has highly been concentrated to very few borrowers, “Less than one percent borrowers have taken 45 percent private sector credits.”
He said that Addis Ababa alone took 80 percent of the banking sector loans and more than 99 percent of bank credits and more than 95 percent of credit account.
In Ethiopia there are over 70 million saving accounts, while the credit account is less than one percent compared in the banking sector. However, the number has shown significant increments owing to some of micro-finance institutions transitioning as banks in the past months.
Solomon told media that NBE is facilitating a regulatory sandbox that shall include new schemes for the implantation, “We are now preparing the framework.”
According to the Vice Governor, the central bank is working round the clock to change the credit scheme trajectory of MSMEs in the country.
“The NBE is working to change this situation and increase access to finance particularly to MSMEs. Digital lending and financial inclusion are a top priority for the government and NBE in the space of digital finance,” he said at the session, adding that, “NBE also recognizes the importance of further improving policy and regulatory environment for digital scheme and access to credit for MSMEs for shares to expand and provide innovative credit services. In this regard a regulatory framework that supports financial institutions to provide digital lending in partnership with mobile money service providers has been implemented.”
Solomon indicated that in the first nine months of the financial year, a total credit of more than 3.6 billion birr has been provided digitally through a couple of banks in partnership with mobile money service provider, telebirr.
The figures have been noted to shoot four-folds when compared to the same period of last year.
Those involved aggressively on the digital lending are the state owned Commercial Bank of Ethiopia and Cooperative Bank of Oromia, which launched a scheme called ‘Michu’, a credit score-based digital lending platform for MSMEs, are the main players in collaboration with the mobile money scheme of the state owned Telecom Company, Ethio Telecom’s telebirr.
The knowledge series aims to bridge the knowledge gap in uncollateralized digital lending and credit scoring and shows how uncollateralized digital lending addresses the access to finance challenges faced by MSMEs in Ethiopia.
MSMEs are the strongest economic development, innovation, and employment drivers. However, access to finance is frequently identified as a critical barrier to their growth.
“I am a firm believer that collaborative learning and knowledge sharing among the financial and digital ecosystem is lacking in Ethiopia. In today’s world, knowledge is no longer confined to a select few. It is to be available to anyone who seeks it. This democratization of knowledge is meant to level the playing field for stakeholders as well as enhance the entire sector in order to provide the best viable solutions to consumers,” Munir Mohammed Duri, Founder and CEO of Kifiya Financial Technologies explains, adding, “In this knowledge series, we have collaborated with many stakeholders to bring together records of learning from different perspectives in the private, and public sectors as well as across various markets in Africa. Focused on utilization of data-driven digital lending, these learnings will inform provisions of data-driven digital credit to the under-banked.”
An IFC study, with insights from several other market studies, suggested that the working capital finance gap for MSMEs in Ethiopia was estimated to be USD 4.9 billion in 2019, with SMEs accounting for 91 percent of the figure. This much larger finance gap for small to medium enterprises is due to a need for capital investment, machinery requirements, a general backlog of foreign currency, and much larger working capital requirements, all of which contribute to the exponential increase in the finance gap.

Safaricom Ethiopia appoints Henok Teferra, Ethiopia’s former ambassador to France as its Chief External Affairs and Regulatory Officer replacing Matthew Harrison Hervey who left Safaricom in December 2022.
Henok who has been serving as Ethiopia’s Ambassador Extraordinary and Plenipotentiary of the Federal Democratic Republic of Ethiopia to France, Spain, Portugal, Holy See and Monaco for the last four years since 2018-2022, will now take over from where his predecessor left off.
Matthew Harrison Hervey who has been serving Safaricom Ethiopia as Chief External Affairs and Regulatory Officer starting from mid-2021 has left the company on December 2022 after the company held its national launch in Addis Ababa on October 2022.

By way of academia, Henok Teferra obtained a Master’s degree in International Public and Private Law from the University of Nice in 1997 and a post-graduate degree in International Economic Law from the University of Panthéon-Sorbonne Paris in 1998. From 2000 to 2001, he worked as a developer-engineer at SYLIS S.A. in Paris, France. Between 2003 and 2010, he was appointed Third, then Second and finally First Secretary at the Ministry of Foreign Affairs of Ethiopia.
From 2010 to 2013, he was Director of Communications and International Affairs at Ethiopian Airlines. From 2013 to 2015, he was appointed Vice President of Corporate Strategy, Communications and Alliances at Ethiopian Airlines, a member of the Board of Directors of ASKY Airlines, and a member of the Star Alliance Management Board.
Henok was reappointed Vice President for Strategic Planning and Alliances at Ethiopian Airlines in 2017. He contributed to the airline’s rapid 25% growth by overseeing the entry into service of one new aircraft per month and the construction of new facilities. He also implemented strategic partnerships and fostered commercial cooperation with other airlines. He has received several awards and recognitions, including the Choiseul 100 Africa and the ASKY Airlines: Airline of the Year Award for Regional Operations.
According to sources, Henok will be the second Local senior management at Safaricom Ethiopia following Andarge Kabtimer, Chief Sales and Distribution Officer.
Since starting its operations with customer pilots in August 2022, and following its national launch ceremony in October 2022, Safaricom Ethiopia has grown its subscriber base to 2.8 million customers across Ethiopia.