Abebe Kefeni on Seifu Show

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Abebe Kefeni has told Seifu he has a new video with Hachalu Hundessa powered by AI.

Foreign banks that wish to enter and operate in Ethiopia are required to register a capital of 40 million USD, according to recent reports.

This amount is comparable to the 5 billion birr capital required from domestic banks when they are established.

So, how much can this 40 million USD capital attract large foreign banks to Ethiopia?

A law allowing foreign banks to operate in Ethiopia has been approved by the House of People's Representatives.

Following the enactment of the law, the National Bank of Ethiopia has also issued a directive outlining the licensing procedures.

The directive states that foreign banks must register a capital of 40 million USD, which is equivalent to the 5 billion birr required from local banks.

It also requires foreign banks to provide documentation showing the source of their funds.

Foreign banks are allowed to operate in Ethiopia through four main channels:

  1. Opening a subsidiary or full-fledged bank.
  2. Opening a branch office.
  3. Establishing a representative office.
  4. Buying shares or equity in existing Ethiopian banks.

Although the required capital must be in foreign currency, it is set at a level comparable to the capital required from local banks.

The key question remains: How attractive is this capital requirement for well-established and capable foreign banks to enter the Ethiopian market?

According to financial expert Mr. Kebour, “I’m not yet convinced.”

 

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