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Ethiopia Issues First Ever Financial License to Foreign-Owned Entity

The National Bank of Ethiopia (NBE) issued a license to Ethio Lease. This makes Ethio Lease the first foreign-owned entity to obtain a license for financial services in Ethiopia.

A subsidiary of Africa Asset Finance Company Inc. (AAFC), a US-headquartered equipment finance firm that owns and operates a group of companies that provides asset-backed lending and leasing services throughout Africa, Ethio Lease officially launched its Ethiopia operations at the Sheraton Addis.

Yinager Dessie (Ph.D.), Governor of NBE, Ahmed Shide, the Ethiopian Minister of Finance, and Girma Wake, Ethio Lease board chairman, and other government officials, as well as relevant stakeholders, have been present at the ceremony.

Girma Wake, Ethio Lease board chairman, has previously worked as Ethiopian Airlines' CEO.

“Being the first company to provide equipment leasing services, Ethio Lease promises to be a game-changer in Ethiopia. We believe this venture has a huge potential to boost the economy while providing significant financial gains for the country," Dr. Yinager said at the event.

Ahmed Shide, welcoming the company to the Ethiopian market, mentioned the move as indicative Prime Minister Abiy Ahmed's pledge to open up the Ethiopian market for foreign investment.

Ethio Lease is set to offer a wide range of leasing services for multiple sectors such as manufacturing, agriculture, healthcare, energy, food processing (including coffee), among others.

It offers long-term leases known as capital leases, which provide companies and individuals with lease contracts that cover the significant portion of the economic life of the purchased equipment.

Depending on the equipment, Ethio Lease will ensure that companies that lease equipment adhere to proper operations, maintenance upkeep, health and safety, and adequate storage throughout the lease period.

It will own and oversee the maintenance including proper use of the equipment, throughout the lease period, providing the lessee with the option to buy the equipment from the company for the residual value, at the end of the lease period.

The leasing concept was introduced in Ethiopia to address equipment and forex shortages and provide easy access to needed equipment, thereby creating local jobs and increasing productivity.

Source: Fana BC