The Ethiopian Deposit Insurance Fund (EDIF) is setting its sights on collecting Birr 6 billion in premiums this fiscal year. Their primary focus is on protecting deposits held by microfinance institutions, banks, and especially small depositors.
Building trust among Ethiopians is a top priority for EDIF, particularly considering financial stability for the vast majority of citizens – over 97% have deposits under Birr 100,000. While Ethiopia's establishment of deposit insurance places them 148th globally, Desalegn Ambaw, EDIF’s CEO, acknowledges there's significant progress to be made, especially in addressing the needs of smaller depositors.
To achieve this, EDIF plans to collaborate with key stakeholders. A memorandum of understanding with the Ministry of Finance and National Bank of Ethiopia is expected to improve proactive responses in managing financial affairs. Additionally, collaboration with international organizations such as the World Bank aims to bridge skill and technology gaps within EDIF.
Looking ahead, EDIF intends to introduce a "Risk Adjusted Premium" system. This initiative aims to promote financial stability by tailoring premiums based on an institution's risk profile. Furthermore, EDIF plans to extend loan options after five years of operation, providing another layer of security for depositors.
Source: The Ethiopian Herald
