The Ethiopian Deposit Insurance Fund (EDIF) has announced that it is working on a new payout mechanism designed to support depositors, particularly first-time savers.

EDIF Chief Executive Officer Desalegn Ambaw (PhD) stated that the institution is updating its operational system to improve long-term service delivery for its members. He noted that EDIF currently guarantees deposits up to Birr 100,000, considering the country's economic conditions, including the fact that a large portion of the population lives below the poverty line.

Over the past two years, EDIF has collected more than Birr 14 billion in premiums through an initial rate of 0.4% and an annual payment rate of 0.3%, with higher rates applied for larger deposits. To support members who may find it difficult to make annual payments at once, EDIF has also introduced a quarterly payment option.

Desalegn explained that in addition to collecting premiums, EDIF invests in government Treasury bills to generate additional funding for its operations. He also acknowledged the need for improvement in the fund’s responsiveness. While the current payout time in Ethiopia is up to 90 days, the global average is around 7 days, highlighting the importance of upgrading technological systems.

The Commercial Bank of Ethiopia (CBE) serves as EDIF’s payment agent, given its nationwide presence and accessibility.

Looking ahead, Desalegn emphasized that EDIF’s priorities include building institutional capacity, leveraging technology, enhancing public awareness, and improving service quality. He added that Ethiopia, as the 148th country to establish a deposit insurance fund, will continue to learn from more advanced systems in other countries.

Source: The Ethiopian Herald