The history of currency and banking in ethiopia and the horn of africa from the middle ages to 1935, ethiopia observer, n. There are 10 insurance companies in ethiopia up from 9 in 2007, with about 200 branches across the country. Commercial bank of ethiopia is the largest, controlling the. Ethiopia industry, information about industry in ethiopia. Another pioneer in this sector is akhtar hameed khan. Under haile selassie i reigned 193074, ethiopias economy enjoyed a modicum of free enterprise. Over the last ten years, the country has achieved doubledigit growth in real terms, averaging 10. Insurance in ethiopia historical development, present status. Banks in ethiopia overview and guide to banks in ethiopia. The birth and development of banking services in ethiopia. Click here to instantly access all the reports, in one place. The period of agents of foreign insurance companies, 1920s 1950s 42 3. Banking sector in ethiopia the total number of banks operating in ethiopia reached 15 as two new private banks joined the industry during the fiscal year.
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. Commercial bank of ethiopia is the largest, controlling the majority assets of the industry. The banking sector in ethiopia has been dominated by the stateowned commercial bank of ethiopia cbe. First conceptualized in the mid1970s, some banks offered customers electronic banking in. Ethiopia remains impoverished, but its economy has become one of the worlds fastestgrowing. Generally, public banks dominate the financial industry in ethiopia. In fact, the history of banking in ethiopia dates back to the turn of the century. This resulted in the establishment of the federal democratic republic under meles zenawi.
The number of bank branches as at june 30,2011 stood at 681. 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. Oct 09, 2019 the romans, great builders, and administrators in their own right took banking out of the temples and formalized it within distinct buildings. It is small, relatively undeveloped, closed and characterized by a large share of state ownership. Electronic banking, or ebanking, is the term that describes all transactions that take place among companies, organizations, and individuals and their banking institutions. 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. Ma gillivray, representative of the british owned national bank of egypt. History of insurance in ethiopia modern insurance service in ethiopia started in 1905. National report of ethiopia sustainable development. Ethiopia experienced famine in 1984 that killed one million people and civil war that resulted in the fall of the derg in 1991. 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. The derg borrowed its ideology from competing marxist parties, all of which arose from the student movement.
As a result, the bank branch to population ratio has seen moderate improvement. Electronic banking in ethiopia practices, opportunities and. In addition, it restructured the two development banks as commercial banks, and introduced a new banking and monetary proclamation that gave more autonomy and further clarified the national bank of ethiopias activities as the regulator and supervisor of the banking sector. Evolution of propoor finance after economic liberalisation in 1994, poverty and food insecurity led the government of ethiopia goe to adopt microfinance as a prime component of its new economic development agenda. There is also the development bank of ethiopia, which is not considered a commercial bank. Later, in ancient greece and during the roman empire, lenders based in temples gave loans, while accepting. Origins and early development of banking in ethiopia ideasrepec. Visit for more related articles at journal of internet banking and commerce. Furthermore, iddir is a local association with long history, most widespread, commonly known in rural and urban settings. In the ethiopian context formal financial sector includes national bank.
The emergence of modern insurance in ethiopia 41 3. Doc history of insurance in ethiopia waqo guta academia. Ethiopias economy experienced strong, broadbased growth averaging 9. Brown joined monash business school as professor of finance. This paper highlights development of ethiopian banking from the beginning of xx century to1936. The structure and performance of ethiopias financial sector. Electronicbanking in ethiopia practices, opportunities. Established in 1963, the national bank of ethiopia nbe started its operations in 1964. Development bank of ethiopia carbon initiative for development cidev component 3 of ethiopia additional financing for energy access project environmental and social management framework esmf for ethiopia offgrid renewable energy program and ethiopia clean cooking energy program final february 2017 addis ababa, ethiopia. To start with, the researcher accepts the universal argument that banks are. In ethiopia cash is still the most dominant medium of exchange and electronic payment systems are at an embryonic stage. This was followed by this in depth access to finance in ethiopia study. Insurance in ethiopia historical development, present.
Especially after world war ii, tourism, banking, insurance, and transport began to contribute more to the. The production and export of cash crops such as coffee were advanced, and importsubstituting manufactures such as textiles and footwear were established. The paper examines the practices, opportunities and challenges of e banking services in ethiopia. Transfer of funds within the country was also a good source of revenue. Hawassa university college of business and economics school of management and accounting assessing the impact of core banking and service quality on customer satisfaction in commercial bank of ethiopia a case of bishofftu branch by. 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. Electronicbanking in ethiopia practices, opportunities and. The case for financial sector liberalization in ethiopia. This period witnessed the establishment, as most readers will know, of the countrys first bank. 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. Download all the latest market reports you need on the banking industry in ethiopia. Ethiopias economic progress by a range of experts, including the world bank, the. In general the trend is to move away form a dominant public sector towards a financial structure where the role of the.
The commercial code and the maritme code of ethiopia, insurance 46 provisions 1960. Ethiopian banking system is still underdeveloped compared to the rest of the world. The today use of the expression microfinancing has it roots in the 1970s when organizations, such as grameen bank of bangladesh with the microfinance pioneer mohammad yunus, where starting and shaping the modern industry of microfinancing. Virtual banking includes all non traditional and electronic means of banking such as atm, phone banking, internet banking ib, credit cards and debit cards etc. Hawassa university college of business and economics school. Currently there are 17 commercial banks in ethiopia, one state owned and 16 private. The ethiopian central bank issues banking licenses and supervises banks in ethiopia. The banking industry is in a much healthier place now than it was after the financial crisis of 2008. Characteristics of the banking sector in ethiopia currently, the banking sector in ethiopia is in a rudimentary and fragile state.
The structure and performance of ethiopias financial sector 5 clearly there is evolving structural shift when deposit is observed by institutions. The history of banking and other financial institutions in ethiopia free download as word doc. Establishment of the first domestic insurance company 44 3. Ethiopias real gross domestic product gdp growth decelerated to 7.
Determinants of banking sector development in ethiopia by. The first privately owned company in banking business was the addis ababa bank s. 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. There has hardly ever been any work in insurance business in ethiopia that delved into the historical and factual aspects of the industry. To start with, the researcher accepts the universal argument that banks are unique from other business organizations.
The paper examines the practices, opportunities and challenges of ebanking services in ethiopia. History of financial institutions contributes to the analysis of how the modern corporation, business and finance have shaped and keep on shaping our world. 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. In addition, it restructured the two development banks as commercial banks, and introduced a new banking and monetary proclamation that gave more autonomy and further clarified the national bank of ethiopias activities as the.
This was around 2000 bc in assyria, india and sumeria. Origins and early development of banking in ethiopia request pdf. Hawassa university college of business and economics. Certainly the banking industry in ethiopia is underdeveloped and therefore there is an all immediate need to embark on capacity building arrangements and modernize the banking system by employing the state of the art technology being used any where in the world. The role of public and private sector banking in ethiopias. The romans, great builders, and administrators in their own right took banking out of the temples and formalized it within distinct buildings. Ethiopia has unveiled its sustainable and integrated development planning documents, the 5year growth and transformation plan and the climate resilient green economy strategy that shaped the content of. Historical background has to do with information regarding the formation date, time of the event, activities, and the business that occurred. Although occupied by the italians for a short time in the 1930s, ethiopia does not share the colonial legacy of its neighbors. The case of the association of ethiopian microfinance. The history of banking and other financial institutions in ethiopia. A special feature of virtual banking is the physical absence of the person seeking banking services at the premises and out of premises even abroad.
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. This was followed by this indepth access to finance in ethiopia study. Access to finance in ethiopia microfinance gateway. In a collection of nine succinct essays, this volume looks at the role of finance in european history from the beginning of the 19th century to the period after the second world war. Pdf origins and early development of banking in ethiopia. Ethiopias growth miracle, coupled with its large population and significant land mass, has attracted. Ethiopian economy and financial sector ethiopia has some notable historical differences compared to other countries in the region.
Endalkachew abebe a research project submitted in partial fulfillment of the requirement for. Microfinance in africa iv fworored as the 2015 deadline for achieving the millennium development goals is fast approaching, the incidence of poverty remains a critical issue in. Ethiopia has unveiled its sustainable and integrated development planning documents, the 5year growth and transformation plan and the climate resilient green economy strategy that shaped the content of this report. Pdf the short life of the bank of ethiopia researchgate. Association of ethiopian microfinance institutions 15 3. The history of banking in ethiopia dates back to the era of the axumite. Agricultural and industrial development bank share company by taking.
Ethiopian banking system is one of the most underdeveloped compared to the rest of the world. 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. Ethiopian banking history started 2000 years ago, during axumite dynasty. Pdf the bank of abyssinia, established in 1905, was given a 50years concession by the emperor.
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