Dollars IN, Birr OUT!

🏵️🏵️🏵️ Happy Ethiopian New Year’s Eve everyone 🏵️🏵️🏵️

And welcome to the latest edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

What we’ve got in store for you:

• ⚡ BUZZ: Hunger for Forex Grows with ETB 100 Billion Loan Program

• 🚧 Service Downtime & Fraud at Ethiopian Banks

• 🪤 PLUS: Common Personal Finance Mistakes

• 🗝️ The Key Takeaways

Thanks for reading!

BUZZ: NBE Rolls Out 100 Billion Birr Loan Program

Banking

Just when you thought the country couldn’t ask for more Dollars, the National Bank of Ethiopia (NBE) has got another plan for it!

In a bold move to boost remittances and attract investments, the NBE has unveiled a massive ETB 100 Billion (about USD 952 million) loan program aimed at the Ethiopian diaspora.

Last fiscal year (2022/23) saw Ethiopia reel in a hefty USD 23.4 billion in foreign currency. Here’s the breakdown of where all that cash came from:

• Service exports: USD 6.3 billion

• Remittances: USD 5.6 billion

• Goods exports: USD 4.1 billion (our goods are flying off the shelves!)

• Foreign Direct Investment (FDI): USD 3.3 billion

• Other private transfers: USD 1.9 billion (a bit of this and that)

Remittances have been sticking around the USD 5.5 billion mark like a loyal friend, despite a hiccup in 2020 when they dipped to USD 4.7 billion with the global pandemic.

The “Debo” campaign is designed to give them a boost by directing more foreign currency towards the formal banking channels, making it easier for Ethiopians abroad to invest back home.

What's The Deal?

• The program offers a mix of mortgage, vehicle, and Small & Medium Enterprise (SME) loans tailored specifically for the diaspora.

• Available through all 31 commercial banks in Ethiopia, these loans are part of an effort to shift remittance flows from informal channels to official banking systems.

• The NBE is also launching a digital platform called Unite.et, allowing Ethiopians abroad to open bank accounts remotely in both local and foreign currencies. This is aimed at simplifying the process and encouraging more active financial participation.

Why Should You Care?

• Secure loans in local currency using your foreign currency account as collateral. Yes, you heard that right—your dollars, euros, or pounds stay safe, earning interest, while you get favorable loan terms in Birr

• Whether you're looking to buy property, start a business, or just secure a loan, this program is designed to make it easier and more beneficial for you—and government coffers!

This initiative not only aims to boost Ethiopia's foreign currency reserves but also signals a broader commitment to financial reforms that can bring long-term stability of foreign currency reserves.

For more details on how to get involved, check out the NBE's official site.