ADDIS ABABA – New financial institution named as Goh Betoch Bank that aims to reintroduce mortgage banking loan for housing construction has set to sell shares to the public According to Getahun Nana, Ex-Vice President of the central bank of Ethiopia and now founding members of Goh Betoch Bank said that currently there are 1.2 million housing shortages in Ethiopia. Hence, the country needs to provide more additional one hundred thousand houses every year in order to cover and meet the growing demand for housing, he added.
In Ethiopia, less than 4% loan package goes to housing construction for both individuals and real estate developers, Getahun, briefed. Adding, ‘‘the potential investors have discussed at Sky Light Hotel here in Addis Ababa on ways investing in the bank.’’
Speaking at the launching ceremony, Engineer Aisha Mohammed, Minister of Construction and Urban Development of Ethiopia said that the new bank will significantly benefit those engaged in real estate and individuals who are interested to build their own houses and it could also have huge potential to create jobs for the communities.
‘‘The bank will have pivotal role in saving and credit service for those who want to own homes. It would have massive significance in solving the housing problems as well. Thus, it would create its own footprint in the economic development of Ethiopia. The private public partnership scheme recently introduced by the government focusing on mega infrastructure projects is now including housing development as taking its priority and the new bank will be part of it,” she said.
When Goh Betoch Bank goes operational next year, it aims to invest one billion birr in housing development projects, according to Eshetu Fantayes who presented the prospectus of the bank.
“We target to invest around 7 billion birr per year in housing development during the fifth year of our operation. The return on investment of Goh Betoch Bank is projected to be 32% after five years with profit of half a billion birr,” he said.
Eshetu added that most African countries cannot allocate 1% of their GDP in housing development, while other European countries spend on average 60% of its GDP.
According to him, Goh Betoch Bank will raise the minimum initial capital of half a billion birr which is around $17 million at the prevailing exchange rate and each shareholder is not allowed to own more than 5% of the total capital.
Currently, there are close to 20 banks operational while about ten banks including six Islamic banks are under-formation in early time and the one of the safest and highly profitable businesses with stable return of investment ranging from 20% to 40% in future, Eshetu pointed out.
The Ethiopian Herald Sept 22/2019
BY MUSSA MUHAMMED
