Ethiopians have had a longstanding culture of supporting each other/one another since time immemorial. Such traditional bonds are of significantly useful in addressing a number of trying socio-economic, socio-cultural, and even socio-political facets. Iddir, Iqub and Mahber (Quasi association) are the most common communal assets further cementing societal threads.
Asmamaw Getaneh is a Sociology and Social Anthropology graduate; working on social cohesion in East Africa. The Ethiopian Herald had of late a stay with him to solicit professional information about traditional/customary social bonds like the aforesaid ones.
He said, “Iddir, Iqub and Mahber are the three main and sustained semi-formal lending traditional organizations that cater to the financial and social requirements of the poor. Iqub has been expanding in Ethiopia, where a greater number of individuals from various social classes are involved and marvelously use for meaningful engagements.”
As to Asmamaw, traditional associations within a given community are established, often informal, social structures that play a vital role in maintaining social order, promoting cooperation, and facilitating community development. These quasi associations can be found at the grassroots level and may or may not receive external support. They are characterized by voluntary membership, shared purpose, and structured interactions, reflecting the community’s values and traditions.
“Iqub, Iddir, and other societal bonds can play an immense role in fostering the communal tie, societal thread, and individual or group unification. Even though informal saving and lending associations were so common in ancient China, low-income nations still frequently use these associations.
Among the oldest and most widely used savings institutions, saving and credit associations are the way that individuals have thrived in both urban and rural environments, attempting to preserve their meager household income in situations when official institutions appear unable to fulfill the demands of an expanding populace.”
According to him, Ethiopia is a developing nation with its own indigenous social, political, cultural, educational, and economic history, much like any other.
He further stated that informal financial institutions play a significant role in society, particularly for the impoverished, who typically lack access to official financing for a variety of reasons. Yes, it is important to scrupulously view how Iqub is a major provider of financial services to households, whose needs are unmet because of bureaucratic procedures and expensive collateral requirements, keeping them out of the formal market.
Consequently, they frequently obtain the funds required for their operations from Iqub schemes, which are financial institutions that lend interest-free funds donated by members to a single scheme participant at a time. Yes, Iqub plays a major role in the establishment, maintenance, and growth of urban micro, small, and medium-sized businesses, he underlined.
The Ethiopian government has long acknowledged the significant role micro and small enterprises can play in reducing poverty, generating jobs, and advancing the private sector. Because of this, governments and donors have made an effort to support MSEs by providing both financial and non-financial services.
The formation of Iqubs, Iddirs and Mahber in the Ethiopian community in various parts of the nation signifies a response to numerous social and economic realities.
According to scholars, Ethiopia’s long-standing informal financial institutions are the most important industries for the nation’s economic growth. Iqub may have evolved over centuries from ordinary, ancient institutions such as labor exchange agreements at the community level based on pre-existing social relations. It is also possible that the Iqub predates the establishment of the nation’s current banking system. Furthermore, Iqub is not just found in urban localities, but it is also popular in rural areas practiced at a lesser extent.
True, Asmamaw said Iqub is composed of homogenous groups, such as persons from the same workplace, ethnic background, trade, educational background, or neighborhood. Additionally, it is regarded as one of the most significant unofficial financial organizations in Ethiopia.
He said, “Participants in the association construct a fund, which is distributed to each donor in turn until all contributors have received the fund. In Ethiopia, these are common in both urban and rural areas. In many instances, however, their membership is homogeneous, consisting solely of women, traders, employees of a certain organization, and members of ethnic or religious groups.”
As to him, Ethiopians shared experience of, for example, displacement, helplessness, dependency, loss of dignity and emotional deprivation, all are threads that hold individual Ethiopians together and sustain those social organizations. The continued existence of Iqubs, Mahbers and Iddirs depends not only on the potency of Ethiopian values and traditions, but also on their long-term viability to provide support for members to attain their economic and spiritual and psychological and cultural needs.
Hence, Iqubs are viewed by members as a temporary self-help organization that could be no longer needed once a member overcomes his or her financial difficulties. However, there is a strong social significance attached to Mahbers and Iddirs. The social environment in Mahber and Iddir settings enables parents and children to gather once a month where household conflicts and frustrations are resolved through the mediation of the members.
Asked about the significance of customary associations like Equb and Iddir, Tseday Getu, who is a chairwoman of Tesfa Le’edget Iddir at Aayat area, Addis Ababa, said that in Ethiopia, an Iddir is a traditional community-based mutual aid association that provides social and economic support to its members, primarily during times of death and other crises. It acts as a form of informal insurance, offering financial assistance, practical help, and emotional support during funerals and other difficult situations.
As to her, as a process of change and continuity in individual values and behavior, the degree to which Iddirs, Mahbers and Iqubs are innovative and adaptive to Ethiopian socioeconomic and cultural environment, has been determining their long term viability as alternative support systems.
For informal social organizations with a culture of non-hierarchical structure, resource exchanges provide members with an important support mechanism in their adjustment process, she underlined.
She said, “Ethiopia is a country endowed with innumerable blessings. It is the origin of humankind and an ancient cradle of civilizations blessed with magnificent scenery and diverse landscape. Its distinctive flora and fauna coupled with a fascinating history, traditional and cultural values, as well as unique alphabets and calendar, make it truly exceptional. What is more, its vibrant music and musical instruments, traditional costumes, cultural food and drinks, including its number one world-renowned coffee, and much more contribute to its remarkable identity.”
She further stated that among the well-established societal values that are established to help each other in good and bad times and cherished by the communities irrespective of any differences, Iqub and Iddir are the most common and easily adaptable ones.
Yes, a number of aspects have demonstrated that informal financial institutions contribute significantly to economic growth by filling in the gaps left by formal financing due to collateral requirements and bureaucratic procedures. This is especially true when giving the poor access to credit and creating chances for saving, he added.
In sum, in Ethiopia, a considerable number of citizens and even academics have determined that equb is the main source of funding for micro- and small-scale enterprises apart from supporting members and their progenies to address temporary challenges.
All in all, understanding the dynamics of customary communal bonds is crucial for policymakers, practitioners, and stakeholders seeking to leverage equb as a tool for economic empowerment and enterprise development. Hence, such a commonly and widely practiced trend has to be well consolidated and needs to be made much more lucrative via attaching due emphasis to it.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD FRIDAY 18, July 2025
