Ethiopia’s various systems have been employed the financial sector to support their national development plans and priority projects. The Imperial government used banks to supplement state farms, energy generating dams, sugar and cottage industries as well other establishments. The military junta, which nationalized private banks and made the Commercial Bank of Ethiopia (CBE) country’s sole commercial bank, on its part, employed the Bank to back its socialist economic plans.
The current administration put in place viable economic policies and strategies that opened the financial sector for domestic investors and paving the way for them to play a meaningful role in the industry. Currently both CBE and privately-owned banks are hugely engaged in expanding branches, building their capacity to collect saving and disbursing loans as well as employing advanced technologies.
CBE, however, has remained the monumental figure in financing public development projects, investments and businesses and playing a pivotal role in nurturing public’s saving culture and serving the economy’s demand for foreign currency.
The Bank has been heavily financing investments in the agriculture, agro-processing, manufacturing, infrastructure and other priority areas and supporting mega projects in the energy, sugar and telecom sectors that would have strategic importance for economic transformation.
CBE’s 75th Anniversary Project Office Manager Ephrem Mekuria stated that the Bank has been playing an immense role in financing country’s economic projects apart from the customary banking services. The Manger noted that CBE has made exemplary activities in issuing various prize schemes and preparing specialized saving systems for youth and women and offering interest free service that would best fit with the demand of a particular group of the society.
Because of the viable interventions, CBE has secured 14.6 billion Birr profit in the 2016/17 fiscal year, which makes it the most profitable Bank of the country. Furthermore, the Bank tops all Ethiopia’s financial institutions in registering over 16.6 million active customers in the reported period.
CBE has also a significant contribution in backing both the public and private development projects and has a meaningful involvement in the national economy. Securing CBE’s finance, the government and private investors enable to establish various industries and service providing institutions whilst individuals changing their livelihood for better. While the total amount of loan the Bank disbursed for private and public entities has reached over152.9 billion Birr, it has also allocated over 14.6 billion Birr in the first quarter of the 2017/18 fiscal year.
When commencing service some 75 years back, CBE’s total reserves was not exceeded 100 million Birr mark and it has managed to skyrocket the figure into 382.2 billion Birr whilst the Bank’s capital and asset reached to 43 and 495.4 billion Birr respectively.
Undoubtedly, the success CBE has registered in accumulating wealth has enabled it to provide the much-desired loans and play a meaningful role in supporting national economic plans.
The Bank has also made a great leap forward in increasing the number of staffs and it has been transformed from recruiting 40 employees to become one of Ethiopia’s leading employing institutions with over 33,000 staffs. In this regard, CBE has a major role in providing job for country’s ever-expanding youth.
Commencing service with two branches in 1942, the Bank has gradually built capacity and manage to own its facilities in Addis Ababa and other state towns that enable it to access more customers and expand services in the respective localities. Now CBE has become the biggest public bank with 1,235 branches across the country.
According to Tesfaye Gutema, Construction Project Office Manager at the Bank, the expansion of the construction projects led CBE to set up her Office to follow up the implementation of all construction projects under its ownership, including the future headquarters. The Office has successfully supervised the construction of Sebeta Building in Oromia State and Renaissance, Zagwe and Gadaa buildings in various parts of Addis Ababa and closely monitors the construction of the 48- stories headquarters, which is expected to become East Africa’s tallest building upon completion. The Bank has also plan to construct new district buildings in Bole Sub City and Bahir Dar and Hawassa towns in the view to provide quality service and expand the domestic saving base.
Alongside increasing number of branches and modernize facilities, the Bank has also been employing technologically-advanced mobile and internet banking systems that significantly easing customers’ access and fostering the level of domestic saving.
CBE President Bekalu Zeleke said that the Bank has given the utmost priority to supplement its services with up-to-date technologies and modernize practices in the bid to remain a globally competitive firm. The President indicated the Bank established a customer contact center in the Gadaa Building to provide a 24-hour information and consultation service for its customers.
CBE is the first Bank in Ethiopia to introduce ATM service for local users and as of September 30, 2017, the number of ATM card holders and Mobile and Internet Banking users reached over four million and 1.36 million respectively.
Furthermore, 1,589 ATM machines and 6,985 POS (Point of Sale) machines were deployed across the country. According to Bekalu, the Bank launched internet banking services in branches connected through integrated banking solutions (Core Banking) in 2012 and offers the service to individual customers as well as companies. The Core Banking system operates on any device that is able to support an internet browser and makes use of anti-hacking and anti E-theft systems building up on the experience of Asian and European banks.
Despite such encouraging trends, CBE has been facing challenges to satisfy public and private entities’ ever-increasing demand for loans and foreign currency that has been aggravated by country’s rapid economic growth of the past decade and plus years.
In this respect, the Bank has made extensive activities and employ various mechanisms to cherish society’s saving culture thereby enhance its capacity of providing loans and foreign currency for development and investment projects as well as businesses.
Bearing the stated facts in mind, CBE needs to consolidate its engagement and implement innovative approaches in financing the economy as well as in the day-to-day operations to advance its journey of becoming a world class commercial bank by 2025.