Lenders are lining up to establish a presence in one of Africa’s fastest-growing and most under-banked economies
By Renee Bonorchis |
Lenders are lining up to establish a presence in Ethiopia, one of Africa’s fastest-growing and most under-banked economies. Now they need the government to let them open their doors.
Over the past two years, Standard Bank Group, Africa’s biggest lender by assets, and KCB Group, Kenya’s largest lender, have joined the likes of Citigroup, Commerzbank and Ecobank Transnational in setting up representative offices in sub-Saharan Africa’s second-most populous country. The lenders are hoping the government will eventually start granting licenses for fully fledged branches.
They are wagering that the country’s ambitions to join the World Trade Organization (WTO), coupled with increasing demand for capital to support the economy, will lead the government to open up an industry that has been closed to investors since a Marxist junta nationalized banks four decades ago. Still, they will be investing in a country that has cracked down on political opponents, with the benefits of faster growth yet to trickle down to the majority of the population.
READ: VIDEO: Ethiopia Is by Far the Best Investment Destination in Africa, Says Karel Claes
“It has the potential to become one of the most exciting banking markets in the region,” said Robert Besseling, Johannesburg-based director at Exx Africa, which advises companies on risks and business risks on the continent. “Government has hinted at liberalization and even privatization of state-protected sectors.”
Exciting market
The prize is a $62bn economy of 105-million people that has grown faster than any other in sub-Saharan Africa over the past decade and may expand 7.5% this year, according to IMF data. Only 22% of adults in Ethiopia have access to a bank account, compared with 70% in SA and a sub-Saharan African average of 34%, according to World Bank statistics.
Read more about “Banks are beating a path to Ethiopia’s door” on BusinessDay
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See also:
- Algeria-based Cevital Group to Invest in Ethiopia
- AccorHotels Will Manage Three Hotels in Ethiopia
- Towards Making Ethiopia Africa’s Investment Hub
- Ethiopia’s Foreign Affairs Minister Meets Globeleq Representatives
- VIDEO: Ethiopia Is by Far the Best Investment Destination in Africa, Says Karel Claes