ADDIS ABABA – Goh Betoch Bank S.C, the first private mortgage bank in Ethiopia, has officially begun operations on Monday with the opening of its first branch in Addis Ababa.
Set up by prominent people in the finance sector including former governor of the central bank Getahun Nana, it plans to serve businesses and individuals to engage in construction, repair and improve their residential houses.
Ethiopia’s banking sector reportedly allocates only 10 percent of its overall credit services to the growing construction sector. Experts believe the mortgage bank could play a vital role in filling this financing gap.
Speaking at the official opening of the first branch on Monday, the Bank’s CEO Mulugeta Asmare stressed Goh Betoch would primarily target medium and low income households to become house owners in major cities of the country.
The bank will provide finance in the form of loan for purchase, construction, repair and improvement of their residential houses as per the needs of the borrowers, he said.
It also plans to build residential houses and avail them for purchase and rent, the CEO said, adding the bank will work closely and in collaboration with the city administrations to realize its objectives.
Goh Betoch Bank, established by 6,658 founding shareholders, joined Ethiopia’s financial sector with 1.1 billion Birr signed and 521.5 million Birr paid up capital.
Addis Ababa City Mayor Adanech Abiebie, who attended the official opening of the mortgage bank on Monday, appreciated the founders of the banks, calling their endeavor critical in addressing the growing need of housing in the city.
The government alone could not resolve the growing house challenge in cities, the mayor said, adding financial institutions who could play a key role in addressing the challenge like Goh Betoch should be supported.
Goh is now the only mortgage bank in the country after the Housing and Saving Bank (HSB) that was formed by the merger of Imperial Savings and Home Ownership Association and the Savings and Mortgage Corporation of Ethiopia mid 1970 during the Derg period.
The latter restructured into Construction and Business Bank (CBB) in 1994 before it became defunct and merged under the state giant Commercial Bank of Ethiopia in 2016, according to reports.
Featured Image caption: At the official opening of its branch located alongside Africa Avenue in Addis Ababa on Monday, Goh Betoch Bank S.C. handed over a 1.5mln Birr check to Addis Ababa Mayor Adanech Abiebie in support of the city’s ongoing work of renovating houses owned by elderlies and low income families. [Photo AAPSO]