Ethiopia is to farm out the disbursement of private sector pensions to five micro finance institutions and a private bank starting on July 8th 2012.
The following micro finance institutions will be serving regional areas; Dedebit Credit and Savings, Oromia Credit and Savings, Omo Microfinance, Amhara Credit and Savings and Dire Microfinance.
The private bank under contract to the Private Organization Employees Social Security Agency will be servicing the Addis Ababa area.
The agency contacted Dashen, United, Nib, Abay, Oromia, Wegagen, Oromia Cooperative and Awash banks but received proposals from only Nib, Wegagen and United said Derjie Wube, Deputy Director of the POESSA. The agency hopes to receive more proposals.The agency decided to work with micro finance institutions in the regions because they have offices in almost every Wereda and are hence more accessible said Tesfaye Gashaw, Director of communications with the agency.
Some of the micro finance institutions are already paying out public sector pensions charging a processing fee of 2 birr and fifty cents per client according to a source with the agency. The rate however could be increased to three birr after negotiations that are currently taking place and POESSA is prepared to match this sum according to Dereje.
A proposal receive from one of the private banks suggested five birr per client noted Dereje.
The POESSA, established in May 2011 will begin disbursing pensions for the first time in the next Ethiopian financial year.
Source: Fortune
