10/16/2007

News / Ethiopia: Public Notary Puts Break On Licensing Access Bank

Linked from: http://allafrica.com/stories/200710160042.html

Wudineh Zenebe
Addis Ababa

The fast paced registration process of Access Bank SC was put on hold last Thursday, falling into a seemingly unexpected bureaucratic trap.

Yirga Tadesse, public notary office general manager, decided to collect documents of Memorandum of Association that were signed by the Bank's 2,500 shareholders in six weeks after it found they were not given the go-ahead from the supervisory body, the National Bank of Ethiopia (NBE).


Discovering that they have not fulfilled the requirements of NBE, Yirga suspended the signings begun at the founding meeting on August 25, 2007. The boxed documents are locked inside the General Manager's office. Even if NBE gives the bank a green light afterwards, the shareholders have to resign the Memorandum of Association documents, as the ones that they have signed is already void, sources told Fortune.

Procedures dictate that when new banks enter the sector they must first meet the requirements set by NBE prior to signing the memorandum of association before the public notary office.

NBE has sole authority to grant licenses to banks who manage to raise the 75 million Br capital threshold. It is after such procedures are fulfilled that the shareholders of the bank sign the memorandum of association at the public notary office.

However, without finalising the prerequisites of NBE, the shareholders went on to directly sign the memorandum, though it was culminated when only 200 people were left to finalise it.

"Our Bank, unlike other banks that only have 20 or 30 shareholders, is established with 2,700 shareholders," Ermyas Amelga, president of Access Bank, told Fortune. "It is because it takes a longer time for the shareholders to sign the Memorandum that we began it earlier."

However, Ermyas disclosed that NBE has given them the go-ahead after they verbally communicated the rationale behind the early start.

Begun, in April 2007 by the main promoter, Ermyas, Access envisions serving its customers with new services and make exceptional returns focusing on adding value.

However, things do not seem easy for the latest entrant, which has planned to make its headquarters the Abebech Metaferia Building, erected on a 436sqm plot where the Old Milk House Villa rested in Kazanchis.

An official at the public notary office told Fortune that further investigations would be made as to how the Bank was not stopped in all these weeks.

Following the financial liberalisation of the mid-1990s, Ethiopia's banking system is portrayed as one of the sources of economic strength. A glance at the colourful bank annual reports, the endless gloomy analysis of non-performing loans (NPL) have given way to a roaring growth and skyrocketing profits. Access Bank, therefore, hopes to take its share of profits in this expanding sector.


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