The Ministry of Education is drafting a proclamation to increase the retirement age for academic staff.
Under the new rule educators will be able to apply for two, five-year extension terms.
If an institution wishes to implement this rule, they need to justify the action three months before the staff’s date of retirement to the Ministry for approval.
The person applying for a retirement extension should hold a PhD or have reached the level of assistant professor. They also must be in good health and have satisfactory employee evaluations.
This will be help professionals and academicians transform knowledge and technology, the draft proclamation states. It goes on to say that raising the retirement age is necessary to ensure global competitiveness and help schools maintain quality standards, in addition to retaining skilled and ethical staff that can maintain excellence in education.
The mandatory retirement age for academic members of staff differs from one country to the other. In neighboring Kenya, at the University of Nairobi the mandatory retirement age is 70 years. However, the University has been retaining some academic staff in service beyond their retirement age in view of their contribution to the needs and objectives of the University. As of 2018, the nation had more than 40 public higher education institutions across the country.
Retirement age increased for educators
Abay Bank’s innovative way to give back
Abay Bank is introducing a new way people can save money to help others. The bank which opened its doors around a decade ago, has introduced a charitable savings account designed to serve humanitarian organizations.
This charitable saving account is a premium interest bearing saving account designed to raise funds from money deposited by people who want to donate or governmental and non-governmental organizations interested in supporting charity organizations from the interest earned in their bank accounts, according to Abay Bank’s statement.
“The donating customer can be any individual or organization including bank customers who want to donate to charitable organizations,” the bank’s statement added.
It stated that charity organizations are a donation receiving customer and can also open the account for themselves.
According to the new scheme, the bank will give the organization a prevailing default saving interest rate in addition to one percent per year, computed based on the minimum deposit balance in the account.
A minimum deposit of 60,000 birr and 100 thousand birr is required for individual and collective organizations respectively in order to get the premium interest rate.
The bank has 4,080 shareholders and a paid up capital of 1.33 billion birr as of last June. Abay now has 162 branches, and close to half a million customers. At the same time their deposit mobilization has reached 9.6 billion birr.
In the past budget year, the bank has secured 419 million birr, and their earnings per share was 284 birr as of their last report.
Intellectual property rights permitted for bank loan collateral
Assuming it is ratified by the House of People’s Representatives, patent rights could soon be used as collateral for bank loans. A draft proclamation named “Movable Property Security Rights” is proposing this become a reality. This would include patents and products that come from them. It can include patients for physical products or ideas such as would fall under intellectual property law.
The proclamation is part of the financial inclusion strategy (NFIS), launched in 2017 with the support of the World Bank, to increase the percentage of adults with a transaction account from 22% in 2014 to 60% in 2020.
The International Finance Corporation (IFC) financed the proclamation drafting process which is based on United Nations Commission on International Trade Law (UNCITRAL).
The working group used Malawi and Zambia as examples. It was made up of the National Bank of Ethiopia (NBE), lawyers and stakeholders in the financial sector.
“There are many people who want to use the potential in their movable assets as collateral so that was the imputes for this proclamation,” according to the explanatory note sent to Parliament. The bill was approved by the Council of Ministers two weeks ago. Currently immovable property and business institutions are used as collateral for loans. Ethiopia has 23.5 percent of its population living under the poverty line and the financial sector has been criticized for leaving out people living in the rural part of country, especially farmers.
The draft brought good news to Fintech and startups because it removes an obstacle to finding finance. The draft is an indication that the economy is opening up and it is becoming easier for consumers to access loans using all types of assets, according to Michael Takie, co-founder of AXIOM Financial Technologies.
AXIOM is developing software to help microfinance organizations and cooperatives provide loans online using algorithms. It uses data to create a credit score looking at many aspects of people’s spending habits and assets such as farm size, amount of fertilizer used, product sales, salary, and mobile top-up history.
“The arrival of this law is extraordinary for us. It will widen the base of loans for farmers, SMEs and startups. It will make it easier for them to access credit,” said Michael who added that valuable intellectual properties are prime collateral for accessing finance.
Michael thinks this will encourage new ideas and innovation because it will be easier for startups to access funding. He added that multi-million-dollar software purchased by banks was not utilized to the extent that it could have been. Microfinances and cooperatives don’t have the budget to purchase the software. Fintech will likely take advantage of proclamations like this one, he added.
The proclamation has 96 articles and eight chapters. It would establish a Collateral Registry Office which would be accountable to the Council of Ministers. NBE will establish the office for now and will appoint the registrar. The collateral registry is an office to manage the electronic system for receiving, storing and making accessible to the public, information about security rights and non-consensual rights in movable property.
The draft bill also recognizes agricultural products, the right to use land, security rights in certified securities, security rights in warehouse receipts, inventories and more.
When NBE was informed about the bill, their staff raised concerns about security. They wanted to know if there was a proper registration system. They also wanted to know what types of security rights the law would cover.
Yinager Dessie (Ph.D.), governor of the National Bank told the press that there have been legal reforms affecting the economy. Ten directives have been amended to relax business activity in the financial sector and four proclamations have also been drafted, including the latest one. The Chief at the Central Bank also revealed that the bank is preparing to allow a scheme which will allow loans without collateral. The issue has been a problem for startups with creative business models and innovative ideas that failed to fulfill the high-security standards set by the banks.
Unless otherwise is provided by the insolvency law, the priority of the secured creditor shall continue during insolvency or liquidation, according to the draft. This sub-article will solve the problem which occurred previously, when banks had difficulty recovering their investment in cases of bankruptcy.
Banks suffering from looting spree
Yinager Dessie (PhD) Governor of the Central Banks told members of parliament that financial institutions are being targeted by looters after unexpected unrest in some parts of the country.
Financial institutions are in critical condition, the governor said, to members of parliament who questioned the amount of money stolen in the western part of Oromia Regional State recently.
“There was just under 15 million birr stolen from 11 branches of six banks,” he said.
Banks were also victimized when unrest occurred in Jigjiga in Somali Regional State last August. When unrest broke out, mobs vandalized the banks there, causing 41 million birr in losses.
“In any instance, when there is unrest, looters find a way to rob banks. The Central Bank can’t protect them unless we work together with regional governments and security institutions,” Yinager said.
In the last seven months, there been 18 more bank branches were opened. Two of these are government owned. There are over five thousand branches and sub branches all over the country which is an increase of 14.4 percent. The two government owned banks have a market share of 30 percent share while 16 private banks holds the remaining 70 percent.
“The increase in the number of branches even exceeds what the government planed to achieve in the second edition of GTP,” he said.
