Hijra Bank the other under formation interest free financial institution announced that it achieved the share sales at the deadline that ended on Monday November 11.
The bank has been effectively going through the formation processes for the past seven months. It has announced the one-billion-birr share sales with half of it or the 500 million birr to be paid.
According to the information Capital secured from one of the founders of Hijra around 75 percent of the share sales have been accomplished. The founder says the anticipate that by the Monday deadline all share sales will be accomplished.
On Sunday the under-formation bank organized a promotional discussion with potential share buyers came from different parts of the country. At the discussion some of the participants insisted the organizers push the deadline for share sales to include more potential buyers.
Meanwhile Capital was informed that the founding board has talked about the issue until, attempts to get further information and the latest development regarding the share sales from Mukemil Bedru, deputy chair of the board but it did not work out.
Recently, ZamZam, a pioneer to introduce the interest free banking in the country, has been announced that surpassed its original share sales target. At first they wanted to sell a billion birr worth of shares, while the actual achievement at the closing date on October 11 surpassed the National Bank of Ethiopia, supervisory body, minimum paid up capital of half a billion birr by one fifth and stands at over 600 million birr.
Within three months the ZamZam was able to sell over 1.2 billion birr in subscriptions and half of it has already been paid. For both the paid and subscribed capital of the bank is the history in the financial industry since there were no one able to collect such kind of sum as a start up in the industry.
On the other hand, the achievement of ZamZam and Hijra, who sells shares almost the same period but achieved their target within a short time, stated as an indicator how much huge finance was idol from the market due to potential buyers refused to run or part of conventional banking.
Some other interest free banks are also in the process of being formed. Recently, the government announced the right to run interest free banking, a practice primarily aligned with Islam. About a decade ago the government issued a directive allowing this but an additional directive mandated that interest free banking be run alongside conventional financial business. This helped ten banks to open a special window for interest free banking, but those who were looking to operate complete interest free banking like ZamZam stopped the process and refunded the collected sum to share buyers.
Hijra Bank to open for business
USAID partners with Ethiopia for better health
The United States, through the US Agency for International Development (USAID) in partnership with the Ministry of Health, launched a five year project to digitize the Health sector. The agency earmarked 63 million USD.
USAID Mission Director Sean Jones and Minister of Health Dr. Amir Aman inaugurated the new activity on November 14, 2019 at Hilton Hotel, which builds on U.S.-Ethiopian efforts to create a modernized health information system that ensures the entire sector has the data, analytics, and skills necessary to improve the health and well-being of all Ethiopians.
The support will back the continued efforts of investments in digital information solutions to further strengthen the country’s health system and improve the quality of services.
The five-year project of Digital Health Activity will train end-users including doctors, nurses, health extension workers, and policy-makers at all levels of the health system to utilize technology more effectively and enable them to better serve patients and families across the country.
“Digitizing the system alone doesn’t mean getting solutions end to end rather it is working on the mind set of all stakeholders,” Amir stressed.
According to the Ministry of Health, currently 88 percent of health centers are digitized and the rest 22 percent will incorporated in this fiscal year, adding that the support from USAID is pertinent to the move.
For five years, USAID will also partner with local universities to introduce courses that develop competencies in health innovations and electronic solutions, and establish career paths that empower young Ethiopians to drive digital solutions across the sector.
The Digital Health Activity will also create opportunities for entrepreneurs and youth-led tech organizations to utilize their expertise in providing support to health centers.
“In addition to simply expanding digital health systems and strengthening the skills of today’s medical professionals, we are also increasing our focus on developing the leaders of tomorrow to drive health innovations far into the future,” said USAID Mission Director Sean Jones.
USAID’s Digital Health Activity is implemented by JSI and a consortium of partners.
The United States is the largest bilateral provider of support to Ethiopia’s health sector, with approximately 150 million USD per year in funding for tuberculosis, HIV/AIDS; malaria; maternal, neonatal and child health; nutrition; and water, sanitation and hygiene. Overall, the United States has provided approximately 4 billion USD in development and humanitarian assistance to Ethiopia over the past five years.
The digital health activity helps to integrate and scale up priority health information system at all levels.
“Digitalizing health systems mean a lot for the Ministry as it corrects the data and improves information about the health of our population,” the Minister added.
ECA to regulate new telecom fees
The Ethiopian Communication Authority (ECA) will be responsible for regulating tariffs when the two new telecom companies receive licenses next March, said Balcha Reba, Director General of the Authority.
The Ministry of Finance held talks about the telecom’s draft regulation document on Tuesday, November 12, 2019 at Sheraton Addis Hotel.
After the government’s bold decision to liberalize telecom last year the Ethiopian Communication Authority was established to regulate the telecom sector.
Some of their responsibilities will be to license and supervise telecom service providers, regulate tariffs and specify technical standards.
“The government announced liberalizing the sector, indeed with the objectives of creating a more competitive environment, promoting customers’ choice, attracting investment and accessibility, lower prices and a higher quality of service,” said Ahmed Shade Minister of Finance.
This was the first opportunity for stakeholders to meet in person although there is a platform for commenting on the Internet.
“Tariff regulation is one of the economic regulatory frameworks, the Authority is dealing with in order to protect the customer, create a fair play ground and consider the expense of the operators when setting the tariff,” Balch added.
More competition means lower prices and better service, according to Balch.
The Director General pointed to security concerns as one reason for keeping telecom in State hands, however now with cyber security technology they are more confident that this can be managed well.
The authority has the right to access data after a court decision and they can fit a router interception at the tower of any operator if they feel security concerns warrant this action. INSA is also working with the Authority to address cyber security issues.
The regulatory framework is supposed to be aligned with an international modality and stakeholders are expected to give feedback in order to create well developed documents.
Other issues addressed at the meeting included the selection process, what mechanisms they would use, the timeline for regulations to be put in place, and standards for competition with Ethio-telecom. 
“I don’t see any problem for a certain company to compete for both [partial privatization and operation] as long as they are capable,” said Tim Kelly from the World Bank group.
“In terms of the timeline, March 2020, is unchanged for both partial privatization and operator licensing the ministry is doing both side by side and the selection process, mechanisms will be decided after the consultation is made with international bench marks,” said Biruk Taye Senior Adviser of the Ministry of Finance.
United profits up 55%
United Insurance Company SC (UNIC Ethiopia) has registered massive achievements in the past fiscal year with 55 percent profit growth.
In its annual general assembly held at the Ethiopian Skylight Hotel on Thursday November 14, UNIC disclosed that its gross profit for the 2018/19 financial year stood at 121.2 million birr, which is one of the top in the industry.
The net profit stood at 106.6 million birr, which is a 55 percent growth compared with the preceding year’s insurance business or operation profit.
Although in the 2017/18 financial year the company’s net profit stood at 123.7 million birr, Meseret Bezabih, CEO of UNIC, told Capital that the previous year’s profit was high as the insurer had secured large revenue from the sale of its shares in Raya Brewery which BGI Ethiopia fully took over last year.
“Comparing the performance of the two years, that is the 2018/19 financial year’s operation with the 2017/18, in terms of insurance business, the latest year’s achievement is over half of the preceding year’s,” Meseret clarified.
In the 2017/18 financial year, UNIC secured close to 56 million birr from its share sales at Raya Brewery, which is located in Maiychew town, 667 km north of Addis Ababa. It has played a role in increasing the insurance company’s profit for the period.
According to the annual report of UNIC, the 2018/19 underwriting profit stood at 173.5 million birr, which was only 121 million birr in the 2017/18 performance period.
The report indicated that the net income of the past financial year expanded to 258.5 million birr when compared with the 237 million birr a year before last year.
One of the pioneer private insurance companies not only in terms of operation but also in terms of paid up capital, UNIC has registered several significant achievements for the past financial year.
For instance, the loss ratio has declined to 60 percent. The loss ratio for the year 2017/18 was 68 percent; that means the latest performance has declined by 8 percent, which is rare in the sector.
UNIC has also registered the highest premium compared with the industry average. For the reported year the company collected 533.6 million birr in premiums from both general and life businesses, which has increased by 13 percent compared with the preceding year. Since the sector premium increase is 6 percent that indicates that UNIC’s premium growth trend was over double compared with the industry performance.
According to the company report , from the general (non life) insurance business UNIC was able to register close to 495 million birr premium that was 438 million birr a year ago and about 39 million birr from life sector. Due to weak performance in the export /import business, the marine premium has declined, while other businesses grew during the period, according to the annual report.
During its 11th extraordinary meeting held a year ago shareholders agreed to double the company capital to half a billion birr that is one of the highest in the sector. Of the 500 million birr capital, close to 375.6 million birr is paid up as of June 30, 2019.
Based on the 2018/19 fiscal year that is closed on June 30, 2019 the total asset of UNIC has reached to 1.52 billion birr from 1.34 billion birr a year ago.
A week ago the company has inaugurated its head quarter located at Tewodros Square. This new facility increases the assets of the company that also owns two other buildings in Addis Ababa, in Qality and Bole Medhanealem area and one in Bahir Dar. The 12 storey head quarter that has a unique set up of four basement parking areas rests on 2,000 square meters and consumed 300 million birr.
In its 25 year history, the company has settled over 1.7 billion birr in claims for its customers. At the same time the company has settled 7.5 million birr in claims for PVT (political violence & terrorism) insurance coverage, a product that was recently introduced in the country and very few other insurance companies offer.
UNIC was formed by less than 100 share buyers has now 478 shareholders, according to the annual report, while it has 50 branches including 12 contact offices. The company was formed in 1994 with a paid up capital of 8.1 million birr.
This year three insurers including UNIC and one bank celebrate their 25th anniversary in different programs.
