- Equity Bank is the latest Kenyan bank to set up a Commercial Representative Office in Addis Ababa, Ethiopia as it prepares to commence operations.
- Kenya’s largest bank by assets, Kenya Commercial Bank (KCB), opened its representative office in Ethiopia in 2015.
- Ethiopia is currently ranked as Africa’s fastest growing economy according to data from IMF.
Kenyan banks are racing to set up new branches in Ethiopia’s capital and strengthen their presence in the East African market.
Equity Bank is the latest Kenyan bank to set up a Commercial Representative Office in Addis Ababa, Ethiopia as it prepares to commence operations.
The Bank has already appointed Hassan Maalim as the Head of the Commercial Representative Office which will be based at Kazanchis-Addis Ababa Ethiopia and is expected to be fully operational in July this year.
“Having completed Phase One of our expansion, the entry into Ethiopia is part of our Phase Two expansion in pursuit of our aspiration of being a Pan African Bank with presence in 10 African countries by the end of the year. This will enable the Bank to continue to scale up and unlock economies of scale especially in this era of digitization and virtualization of banking,” said Equity Group CEO and MD, Dr. James Mwangi.
The entry of Equity Bank into Ethiopia, a country with a population of nearly 100 million people, follows Ethiopia’s government appointment of a privatization commission and the ongoing reforms which are aimed at promoting a growing private sector.
Ethiopia is currently ranked as Africa’s fastest growing economy according to data from IMF.
Kenya’s largest bank by assets, Kenya Commercial Bank (KCB), opened its representative office in Ethiopia in 2015 and has recently said it will be looking to make its entry through a partnership with an Ethiopian bank or opening a fully-fledged subsidiary in the country once the market is opened to foreign lenders.
“Our main area of focus is to have a business and presence in Ethiopia. We hope that by the end of 2020 we can be allowed to go further whether by opening a branch or through our mobile lending platform,” KCB chief executive Joshua Oigara told the Business Daily in March.
A number of other Kenyan financial institutions, including Co-operative Bank and Stanbic (through its South African parent Standard Bank Group) are also eyeing a piece of Ethiopia.
Standard Bank received a licence to open a representative office in Ethiopia in 2015.
In addition to the financial sector, the Ethiopia government is also said to be considering opening up the telecommunications sector to foreign investors, which would see a lot more Kenyan firms such as telecommunication Safaricom move to exploit the country’s vast market.
In recent months, Safaricom has expressed interest to roll out of its M-Pesa business in Ethiopia.