Economy
Two foreign banks apply to enter Ethiopia through greenfield investments
Capital Ethiopia · 2 hours ago · Read the Full Story on Capital Ethiopia
AI SUMMARY
The National Bank of Ethiopia has confirmed that two foreign banking institutions have formally applied to enter the domestic market through greenfield investments.
- Two foreign banking institutions have formally applied to enter the Ethiopian domestic market through greenfield investments.
- The applicants are seeking to establish new, fully foreign-owned banking operations from the ground up rather than acquiring stakes in existing local banks.
- Ethiopia's banking sector had been closed to foreign commercial banks since 1975.
- The Banking Business Proclamation No. 1360/2024 ended the nearly 50-year ban on foreign participation in the banking sector.
- Strategic foreign investors are permitted to hold up to 40% of the subscribed capital of a local bank, with total foreign ownership capped at 49%.
- Foreign banks establishing subsidiaries or branches must meet a minimum capital requirement of 5 billion birr fully paid in acceptable foreign currency.
- Frezer Ayalew, Director of the Supervision Directorate at the National Bank of Ethiopia, declined to provide details on the applicants or their operational timelines.
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