The commercial bank of ethiopia cbe is the largest commercial bank in ethiopia as of june 2015, it had about 303. Banking in ethiopia started in 1905, with the establishment of the bank of abyssinia that was owned by the ethiopian government in partnership with the national bank of egypt then under british rule. Characteristics of the banking sector in ethiopia currently, the banking sector in ethiopia is in a rudimentary and fragile state. The history of banking and other financial institutions in. The paper uses ordinary least square ols technique to see the impact of determinants on profitability of ethiopian commercial banks.
All banks have to be licensed by the countries financial regulatory body, the national bank of ethiopia to engage in banking business. In fact, the history of banking in ethiopia dates back to the turn of the century, when, in1905, the bank of abyssinia was established in addis ababa, under the reign. The goe allowed the establishment of private banks and insurance companies in 1994, but does not yet permit foreign ownership in this sector. Commercial bank of ethiopia is the largest, controlling the majority assets of the industry. Origins and early development of banking in ethiopia request pdf. People have lived in ethiopia for thousands of years. In fact, the history of banking in ethiopia dates back to the turn of the century, when, in 1905, the bank of abyssinia was established in addis ababa, under the reign of menelek ii. The history of banking in ethiopia dates back to the era of the axumite dynasty. In fact, the history of banking in ethiopia dates back to the t.
Following the agreement, the first bank called bank of abysinia was inaugurated in feb. Ethiopian banking history, in fact, goes as far back as 1905, when the first bank, the bank of abyssinia was establi shed in the country. Ethiopian banking sector needs to be tuned to the following additional marketoriented reforms in order to benefit positively from the harmonization of financial intermediation with economic growth. Origins and early development of banking in ethiopia by arnaldo. By 100 ad a kingdom called axum existed in ethiopia. The article covers the prehistory and history of ethiopia from its emergence as an empire under the aksumites to its current form as the federal democratic republic of ethiopia as well as the history of other areas in what is now ethiopia such as the afar triangle. The capital is addis ababa new flower, located almost at the centre of the country. The history of banking in ethi opia goes back in fact to the reign of the emperor menelek il. Ethiopian banking history, in fact, goes as far back. The derg borrowed its ideology from competing marxist parties, all of which arose from the student movement. Citeseerx competition in ethiopian banking industry. Situated in the horn of africa, ethiopia is bordered by eritrea to the north, sudan to the west, kenya to the south, somalia to the east and djibouti to the northeast. But a well structured banking system started to evolve starting in the 1940safter the italian departure. Pdf origins and early development of banking in ethiopia.
Banks in ethiopia overview and guide to banks in ethiopia. Oro agent it is the brand name we use for oib agent banking service which provides limited banking services. Banco di roma and banco di napoli also continued to operate. The first privately owned company in banking business was the addis ababa bank s. Regulations and procedures details written by 2m editor published on 07 february 2012 category. One of them, the ethiopian peoples revolutionary party eprp, believed so strongly in civilian rule that it undertook urban guerrilla war against the military rulers, and anarchy ensued in the following years. This paper highlights development of ethiopian banking from the beginning of xx century to 1936. Bounded by sudan to the west and north, kenya to the south, somalia to the southeast, and eritrea and djibouti to the northeast, ethiopia is a pivotal country in.
It was in 1905 that the first bank, the bank of abyssinia, was established based on the agreement signed between the ethiopian government. The modern e banking methods like atms, debit cards, credit cards, tele banking, internet banking, mobile banking and others are new to the ethiopian banking sector. The history of banking and other financial institutions in ethiopia. The country lies completely within the tropical latitudes and is relatively compact, with similar northsouth and eastwest dimensions. Financial sector reforms, competition and banking system. Financial sector in ethiopia ethiopian bankers association. However, modern banking in ethiopia started in 1905 with the establishment of. In fact, the history of banking in ethiopia dates back to the turn of the century, when, in 1905, the bank of abyssinia was established in addis ababa, under the. Thus, during the seventeenth century, amsterdam, which had experienced the benefits of the great maritime commerce of its traders as early as the. Ethiopian grade 12 ict textbook for students pdf download. The ethiopian empire abyssinia was first founded by ethiopian people in the. This paper highlights development of ethiopian banking from the beginning of xx century to1936.
The bank carried our typical commercial banking business. Situated in the horn of africa, ethiopia is bordered by eritrea to the north, sudan to the west, kenya to the south. Banking, microcredit and saving businesses are areas of investment exclusively reserved for ethiopian. The ethiopian central bank issues banking licenses and supervises banks in ethiopia. Ma gillivray, representative of the british owned national bank of egypt marked the introduction of modern banking in ethiopia. Ethiopia the agreement that was reached in 1905 between emperor minilik ii and mr. It contrasts with regional and international peer countries where banking industries have a much higher share of private sector and foreign participation. Oro cash allows you to conduct financial transactions by using your mobile device. The ethiopian government has legalized a mobile and agent banking regulatory framework to permit the countrys banks and microfinance institutions to offer various financial services through the use of mobile devices and agents as delivery channels effective 1 january 20. In 1906 a branch in harar eastern ethiopia was opened at the same time of the inauguration of bank of abyssinia in addis ababa. Particular attention is given to the central banking system, organisation, regulationsupervision and the monetary policy. Electronic banking in ethiopia practices, opportunities and.
This period witnessed the establishment, as most readers will know, of the countrys first bank. Currently as per national bank of ethiopia estimates there are 18. Addis ababa i think we do not have a competitive but rather a cooperative advantage, says meaza ashenafi, who is the chairperson of enat bank an ethiopian privately owned bank established with an intention of empowering women of ethiopia. Eba stands with all the capacity to be sole lobbying agent for member banks, the association aspires to evolve into dependable training, networking and sectorial research institute that serves the entire financial sector. Established in 1963, the national bank of ethiopia nbe started its operations in 1964. Few events in the modern history of ethiopia have had.
Determinants of banking sector development in ethiopia by. We take a deepdive into ethiopias banking sector and coveracross the following 70. There is also the development bank of ethiopia, which is not considered a. The birth and development of banking services in ethiopia. The ethiopian banking industry as a whole has a net work of 521 branches at the end of the fiscal period ended in june 2008, which is the lowest compared to the size of the country 1. Shariacompliant finance boosts financial inclusion in ethiopia, but a fullyfledged islamic bank has yet to take root. However the first well known kingdom in ethiopia rose in the first century ad. The findings of the study show that all bank specific. The following is a brief highlight of the governing banking business law, proclamation no. The history of banking and other financial institutions in ethiopia free download as word doc. E banking which refers to the use of modern technology that. Ethiopia is the largest and most populated country in the horn of africa. Ethiopian bankers perception of electronic banking in. Origins and early development of banking in ethiopia.
The emperor, as a second step after the institution of a national monetary system,6 wanted to establish a bank in the country, at that time called abyssinia. Electronicbanking in ethiopia practices, opportunities and. There is also the development bank of ethiopia, which is not considered a commercial bank. This paper has examined the history of the ethiopian banking system. Currently there are 17 commercial banks in ethiopia, one state owned and 16 private. In fact, the history of banking in ethiopia dates back to the turn of the century, when, in1905, the bank of abyssinia was established in addis ababa, under the reign of menelek ii. Origins and early development of banking in ethiopia ideasrepec. The history of modern banking in ethiopia goes back to 1900 when an agreement was reached in 1905 between emperor minilik ii and mr. The ethiopian banking sector is currently comprised of a central bank the national bank of ethiopia or nbe, one state owned development bank, a government owned commercial bank and sixteen private banks. The unexpectedly limited impact of the post1975 policy changes on the quality of bank lending and. The early history of banking in ethiopia, with its distinctive mixture of foreign and government financial institutions, is briefly described in section 2. In ethiopian context, the financial system is dominated by banking industry, and yet, it is amongst the major underbanked economy in the world. Called the bank of abyssinia, or in amharic yeityopya bank, it was an affiliate of the national bank of egypt, and was founded in 1905. Banks performances are governed largely by macroeconomic performances than competitive parameters as high low performances coincided with good bad macroeconomic conditions.
This event marked the introduction of banking in the country. Oro card enjoy fast and convenient card banking services with oromia international bank atms 247. Ethiopian banking history, in its modern sense, began towards the end of the reign of emperor menilek. National bank of egypt having been entrusted of the.
Pdf the short life of the bank of ethiopia researchgate. Economic history reveals that the center of commerce never stayed long in one place, as well as the growth of commercial banking activity. Islamic banking in ethiopia offers muslims financial inclusion. It is small, relatively undeveloped, closed and characterized by a large share of state ownership. Ethiopian grade 12 ict information communication technology textbook for students pdf download. These measures include 1 the privatization of the dominant stateowned commercial bank of ethiopia. Brief history, energy demand and its implication on environment by. Request pdf origins and early development of banking in ethiopia this paper highlights development of ethiopian banking from the beginning of xx century to1936. For 4 the term ethiopia has a greek origin, although of uncertain etymology.
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