History of banking in ethiopia pdf

For 4 the term ethiopia has a greek origin, although of uncertain etymology. Ethiopia was established in 1942, and a number of foreign bank branches and a private bank were operating in competition with the government owned commercial bank until they were nationalized and merged into one government owned monobank in 1976. 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. The ethiopian empire abyssinia was first founded by ethiopian people in the ethiopian highlands. Besides the customers can, buy and sell securities, check stock market information, check currency rates, check balances, see which checks are cleared, transfer money, view transaction history and avoid going to an actual bank. However the first well known kingdom in ethiopia rose in the first century ad. Background and structure of the financial sector in ethiopia 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. Eventually in 1980 this bank was itself merged with the commercial bank of ethiopia s. Goals include promoting rapid economic growth and improving service delivery. Doc the history of banking and other financial institutions. Chapter 1 addresses the question of why banks are regulated in order to establish the basic purposes, rationale, and goals for banking regulation, and to provide a framework for evaluating bank regulations. Historical development, present status and future challenges explores the historical trajectories, thoroughly examines its emergence and the tortuous path it has gone through ever since the inception of insurance. However, three other banks were established in the next ten years.

Indeed, the ethiopian banking sector is dominated by one large stateowned bank, the commercial bank of ethiopia cbe. The history of currency and banking in ethiopia and the horn of africa from the middle ages to 1935. Prior to this proclamation, the bank used to carry out dual activities, i. The east india company established the bank of bengalcalcutta 1809, bank of bombay 1840 and bank of madras 1843. Table 2 presents the assets of ethiopian banks for 19982006. Origins and early development of banking in ethiopia by. The banking sector in ethiopia has been dominated by the stateowned commercial bank of ethiopia cbe. However, modern banking in ethiopia started in 1905 with the establishment of. Since the logo of this bank is a star, its head office in mumbai is located in star house, bandra east, mumbai. This will be followed by section three where the analysis of the financial sector in the pre and post reform periods is made. In subsaharan africa, eibs engagement is geared towards promoting local private sector development. The bank of abyssinia, a private financial institution established in 1905 in cairo under egyptian law, was given a 50years concession for carrying out banking activity in ethiopia by the emperor. The 1963 banking law allowed for other commercial banks to operate.

In ethiopia cash is still the most dominant medium of exchange and electronic payment systems are at an embryonic stage. The competitive banking situation that started to flourish during the 1960s and 1974s was. 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 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. Before the commencement of modern insurance service in the country, there have been traditional practices by which people help each other whenever they face either financial difficulties or needs assistance. However, in the post 200203 period inflation has kicked in while the government has moved towards less conservative policy exercise. The history of banking and other financial institutions inethiopia. The banking sector in ethiopia was opened for private investors since the 90s. This paper highlights development of ethiopian banking from the beginning of xx century to1936.

Ethiopia s location gives it strategic dominance as a jumping off point in the horn of africa, close to the middle east and its markets. Electronic banking in ethiopia practices, opportunities. The emergence of modern insurance in ethiopia 41 3. 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.

The structure and performance of ethiopias financial. 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 ethiopian central bank issues banking licenses and supervises banks in ethiopia. To recommend appropriate actions to be taken to promote ebanking in ethiopia. Generally, public banks dominate the financial industry in ethiopia. Pdf the short life of the bank of ethiopia researchgate. This was around 2000 bc in assyria, india and sumeria. This period witnessed the establishment, as most readers will know, of the countrys first bank. National bank of ethiopia 1 201718 annual report governors note 1. The dashen bank atm is available 24 hours a day, seven days a week and 365 days a year providing service to dashen debit cardholders and international visa cardholders coming to the country. The capital is addis ababa new flower, located almost at the centre of the country. Ethiopian banking history, in fact, goes as far back. Electronicbanking in ethiopia practices, opportunities.

Ebanking definition of ebanking electronic banking, also known as electronic funds transfer eft, is simply the use of electronic means to transfer funds directly from one account to another, rather than by cheque or cash. The history of banking in ethiopia dates back to the era of the axumite dynasty. Insurance in ethiopia historical development, present. In fact, the history of banking in ethiopia dates back to the t. Moreover, bank concentration, defined as the asset share of the three largest banks, is 87. Binyam teshomeworld bank the world bank group wbg, with private and public sector partners, set an ambitious target to achieve universal financial access ufa by 2020. 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. These bodies view the expansion of the private banking system in a prudent and controlled manner as key to the success of ethiopias growth and transformation plan gtp. Origins and early development of banking in ethiopia ideasrepec.

The three private banks, banco di roman, banco di napoli and the addis ababa bank s. 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. Origins and early development of banking in ethiopia by arnaldo. The history of banking in ethiopia goes back in fact to the reign of the emperor menelek il.

It was given a banking monopoly for fifty years, including the right to issue notes and coins. The history of banking began with the first prototype banks which were the merchants of the world, who gave grain loans to farmers and traders who carried goods between cities. Banks in ethiopia overview and guide to banks in ethiopia. As ethiopians embark on a massive effort to bolster its educational system, great opportunities and significant challenges will shape the course of policy and planning for the future. Professor glyn davies, economic adviser to the julian hodge bank ltd, and sometime chief economic adviser to the secretary of state for wales, and then to the bank of wales, is an ideal person to write the history of money itself. The first bank to be established in ethiopia was the bank of abyssinia in 1905. A history of early twentieth century ethiopia, richard pankhurst, 1997. In ethiopia, inflation has remained reasonably stable before 200203. The unexpectedly limited impact of the post1975 policy changes on the quality of bank lending and management, and therefore solvency, is analysed in section 3. The history of banking and other financial institutions in ethiopia free download as word doc. The first privately owned company in banking business was the addis ababa bank s. This indicates that the ethiopian financial sector is highly controlled by the government, a finding that is consistent with dailami 2000, who ranked ethiopia as the most closed country in. 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. Origins and early development of banking in ethiopia.

The structure and performance of ethiopias financial sector 5 clearly there is evolving structural shift when deposit is observed by institutions. Ethiopia is the largest and most populated country in the horn of africa. In section two a brief overview of banking history in ethiopia is made. Pdf origins and early development of banking in ethiopia. Ethiopian banking system is still underdeveloped compared to the rest of the world. The bank is a key provider of both longterm financing and expertise, supporting investments that foster eu policy objectives, inside and outside the eu. C was formed in accordance with article 304 of the commercial code of ethiopia with the objective of operating in the banking industry.

Established in 1963, the national bank of ethiopia nbe started its operations in 1964. There has hardly ever been any work in insurance business in ethiopia that delved into the historical and factual aspects of the industry. In 1906 a branch in harar eastern ethiopia was opened at the same time of the inauguration of bank of abyssinia in addis ababa. Few events in the modern history of ethiopia have had. The birth and development of banking services in ethiopia. The national bank of ethiopia was established in 1963 by proclamation 206 of 1963 and began operation in january 1964. The history of banking and other financial institutions in ethiopia. This event marked the introduction of banking in the country. In 1963, a new banking law split the functions of the state bank of ethiopia into central and commercial banking as the national bank of ethiopia and the commercial bank of ethiopia respectively. A bank is generally understood as an institution which provides fundamental banking services such as accepting deposits and providing loans. Electronicbanking in ethiopia practices, opportunities and. The world bank is helping to fight poverty and improve living standards in ethiopia. There is also the development bank of ethiopia, which is not considered a commercial bank. First conceptualized in the mid1970s, some banks offered customers electronic banking in 1985.

The paper examines the practices, opportunities and challenges of e banking services in ethiopia. The derg borrowed its ideology from competing marxist parties, all of which arose from the student movement. 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. Determinants of banking sector development in ethiopia by. Bank of india was founded in september 1906 as a private entity and was nationalized in july 1969. History of insurance in ethiopia modern insurance service in ethiopia started in 1905. To analyze the status of electronic banking in ethiopia to investigate the main challenges and opportunities for ebanking in ethiopia. Banking in subsaharan africa european investment bank. 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. The structure and performance of ethiopias financial sector. Dashen bank, a forerunner in introducing e banking in ethiopia, has installed atms at convenient locations for its own cardholders. Establishment of the first domestic insurance company 44 3. But a well structure banking system started to evolve starting the 1940 safter the italian departure. To understand modern ethiopia s needs and the context of educational reform, one must understand the history of education in the country.

Characteristics of the banking sector in ethiopia currently, the banking sector in ethiopia is in a rudimentary and fragile state. The commercial bank of ethiopia cbe, the largest bank in the industry, accounts 38. Electronic banking, or e banking, is the term that describes all transactions that take place among companies, organizations, and individuals and their banking institutions. Sep 14, 2017 history of banking in india pdf gives the brief history of banking sector in india. Ethiopias economic progress by a range of experts, including the world bank, the african development bank afdb, and the international monetary fund imf. Banking in ethiopia is a publicprivate enterprise and is dominated the public owned commercial banks namely commercial bank of ethiopia and development bank of ethiopia.

These were produced by the greeks in ionia, in the western part of modern turkey not very far from the city of ephesus. Development bank of ethiopia dbe is a specialized bank in project financing and is not a deposit taking institution nbe, 2014. Commercial bank of ethiopia is the largest, controlling the majority assets of the industry. The period of agents of foreign insurance companies, 1920s 1950s 42 3. The commercial code and the maritme code of ethiopia, insurance 46 provisions 1960. Currently there are 17 commercial banks in ethiopia, one state owned and 16 private. The case for financial sector liberalization in ethiopia.

In his fifteen years as sir julian hodge professor of banking and finance at the university of wales institute of. But a well structured banking system started to evolve starting in the 1940safter the italian departure. This pdf is very important for banking exams like ibps po and clerk, sbi, rbi and others. Have your paycheck deposited directly into your bank or. 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. Some 18 private banks have since established and have been a significant engine for the growing economy. Ancient types of money known as grainmoney and food cattlemoney were used from a time of around at least 9000 bc, as two of the earliest things that could be used for the purposes of barter. It gives you the history of banking before independence, ebanking, history of reserve bank, history of sbi bank and many more. Ethiopian banking history, in its modern sense, began towards the end of the reign of emperor menilek. By 100 ad a kingdom called axum existed in ethiopia. Doc history of insurance in ethiopia waqo guta academia. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the private sector is becoming increasingly important. It is small, relatively undeveloped, closed and characterized by a large share of state ownership.

The history of banking and other financial institutions. Origins and early development of banking in ethiopia request pdf. Feb 15, 2005 this paper highlights development of ethiopian banking from the beginning of xx century to 1936. The early history of banking in ethiopia, with its distinctive mixture of foreign and government financial institutions, is briefly described in section 2.

The commercial bank of ethiopia cbe is the largest commercial bank in ethiopia as of june 2015, it had about 303. People have lived in ethiopia for thousands of years. The country lies completely within the tropical latitudes and is relatively compact, with similar northsouth and eastwest dimensions. During this period the government exercised tight fiscal and monetary policies. E banking gives customer the control over nearly every aspect of managing his bank accounts. All epayment methods share a number of common characteristics. 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. The emergence of ebanking in ethiopia goes back to the late 2001, when the largest state owned commercial bank of ethiopia cbe introduced atm to deliver service to the local users. These measures include 1 the privatization of the dominant stateowned commercial bank of ethiopia. Jun 18, 2018 in ethiopia, women account for a disproportionate share of the unbanked, and the gap is widening. Sector banking in ethiopia s future economic growth tom keatinge over the past decade, ethiopia has achieved impressive economic growth averaging close to 11 percent annually.