The first private mortgage bank, Goh Betoch Bank grasps authorities’ attention receiving applause for its initiative which is aligned with government policy as well as bridging the gap needed in the housing market.
The bank that opened its door as of Monday October 25 in the presence of Adanech Abiebie, Mayor of Addis Ababa City Administration, as the 21st financial firm stated that it will focus on providing service from branches that will be expanded in the capital and towns alike.
Adanech said that despite the financial sector’s growth in Ethiopia specialized banks like Goh are rare. She appreciated those who took the initiative to introduce such kind of a bank that is of course big news for dwellers in the city.
“We will tirelessly support the bank in order for it to grow and attain its goal,” the Mayor said.
“To narrow the growing demand, the city administration is taking different initiatives and strategies, while financing is a crucial bottleneck which ought to be solved. I am delighted to see such kind of a bank becoming operational which will play an instrumental role in the access to finance for the housing scheme,” the Mayor said whilst recalling the issues of housing problems within the capital.
Chaltu Sany, Urban and Infrastructure Minister, said that housing is a problem that has remained as a big homework for the government. She reminds that the key challenge for the sector development is lack of available developed land and finance. “That grabbed the government’s attention under the ten year plan and we will work in order to solve the situation and to attain tangible change in the sector,” she said.
Goh which is now the first and only private mortgage bank in Ethiopia and targeted to introduce different initiatives to achieve its plan to do business within the housing sector. It is expected to mobilize finance from different sources including overseas entities to boost the mortgage activity in the country mainly in urban areas.
Studies indicated that to ease the current accumulated housing demands, at least 1.2 million houses should be built as soon as possible, besides that every year 100,000 houses have to be constructed to cover fresh demands.
Seventy percent of the existing houses in cities around the country are below standard and actually need major renovation.
“Meanwhile this is the reality; the current financial firms are not providing the required fund for the housing and construction sector. Due to that we formed our bank to fill the gap,” Getahun Nana, Chairperson of Board of Directors of Goh and former Vice Governor of NBE said.
According to data from NBE the construction and housing sector has not benefited more than 10 percent of the total loans that banks provide.
Goh is also expected to provide other banking products and targets to provide one billion birr loan in the first year of operation and projects to provide 6.4 billion birr in its fifth year.
Goh plans to mobilize 1.3 billion birr deposit in its first year operation.
The bank includes 6,658 shareholders. Its subscribed capital is about 1.1 billion birr of which 521.5 million is paid up.