Goh Betoch Bank SC, the extraordinary and first mortgage financial firm, sees daybreak to open its doors starting from the Ethiopian New Year.
National Bank of Ethiopia (NBE) has officially provided the green light for the bank to commence operation.
The bank announced that it expects policy support from the regulatory body, NBE to amplify the required success, while Yinager Dessie, Governor of NBE, promised to back the operation of the first private mortgage bank.
At the official ceremony of awarding the license from NBE Getahun Nanam, Chairperson of Board of Directors of Goh and former Vice Governor of NBE said that the bank has been in process for three years to realize the dream to become the first mortgage bank in the country.
He said that the housing financing scheme in Ethiopia is very poor despite the demand being very high making the housing issue a top priority.

Getahun cited a study that to ease the current accumulated housing demands, at least 1.2 million houses ought to be built as soon as possible, “besides that every year 100,000 houses have to be constructed to cover fresh demands.”
According to the veteran financial pundit, 70 percent of the existed houses in cities are under standard that actually need reconstruction.
“Meanwhile this is the reality; the existed financial firms are not providing the required fund for the housing and construction sector. Due to that we are formed to fill the gap,” the Board of Directors Chair explained.
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 that is also expected to provide other banking products targets to provide one billion birr loan in the first year of operation and would get bigger to 6.4 billion birr in its fifth year.
Mulugeta Asmare, founding president of Goh, said that the bank is expected to see some policy changes from the regulatory body and the government in general to attain its target, which is also one of the government top economic development pillars that is mentioned on its ten year economic plan.
“Currently, except the Development Bank of Ethiopia all banks have similar operation and with similar policy but when it comes to Goh, we are coming with different services that needs different regulation and policy from the regulatory body,” he elaborates, adding, “due to that starting from policy change we need support from NBE to amplify our operation.”
“We want to see preferential treatments on NBE policies like the composition on long term loans portfolio, which is now 20 percent of the total portion of loans and advances for commercial banks, and enable to be partner with foreign fund sources,” Mulugeta, who is well know by his role to register massive success at Bank of Abyssinia as a president, told Capital.
The policy change on the composition of loan portfolio would allow the bank to get huge amount of long term deposit and at the same time provide long term loans that are given for more than five years.
Goh has targeted that the majority share of loans portfolio would be long term.
“There are also opportunities that Goh shall work with international institutions to access and using idle funds to support our mortgage business, due to that on this side also NBE is expected to make consideration,” he explains, while he added that so far the bank would use the current environment for operation.
Mulugeta said that the bank is also expects conducive policy environment and other segments of supports from Ministry of Urban Development and Construction and similar public offices in regions and cities to realize the housing solution in the country.
Yinager said that NBE will consider supports for such kind of specialized financial firms “the country needs different specialized banks besides the existing commercial banking scheme.”
He said that currently, most of the existing banks are financing the commerce, while residential housing problem mainly in urban areas is very high that should be backed by a financing scheme.
The governor appreciated the initiative of Goh, which formed to support the housing and construction sector that is also one of the tools for economic growth in the country.
“On our ten year economic plan, the government and political leaders have underlined that special support shall be provided for banks that are forming on the focus of housing financing,” Yinager says, adding, “the sector and demand is very high that needs more similar banks and the government will also provide special support.”
“As per the NBE rule, we have to have core banking and to do that we have already hired Temenos, Geneva, Switzerland based technology firm that is engaged with different banks in Ethiopia in related with technology support,” Mulugeta who will become the first private mortgage bank president in Ethiopia, explains adding that it will be fully ready in few months time.
Until Temenos’s project becomes operational, the bank has planned to carry an installed system as transitional core banking scheme that is developed locally, while Websprix is also finalizing the establishment of the data center that is crucial to make effective the core banking technology.

Goh includes 6,658 shareholders. Its subscribed capital is 1.056 billion birr of which 521.5 million has been paid up.
Goh is the first after the Housing and Saving Bank (HSB) that was formed by the merger of Imperial Savings and Home Ownership Association and the Savings and Mortgage Corporation of Ethiopia mid 1970 during the Derg period. HSB was also reconstituted to Construction and Business Bank (CBB) in 1994 before it became defunct and merged under the state giant Commercial Bank of Ethiopia in 2016.
Even though these days banks are providing some sort of financial schemes to obtain housing it is mostly focused on the upper class of the society that may have already the facility and want more or for those whose income is extraordinary, as opposed to the general public or civil servants.
During the Derg era several urban dwellers mainly civil servants and housing associations benefited from a plan by HSB to own their property in cities and towns of the country. Even though the HSB loan scheme realized their wish to own houses, the scheme did not continue as usual after the fall of the Derg regime. Due to the former HSB that changed its name to CBB focused on commercial banking services.
Since then the housing scheme has been neglected from the loan scheme of the financial firms until the condo housing project which was introduced by the government in 2004, which is fully controlled by the government. Lease has also been the other option to secure a plot and construct residential houses; however it is not affordable for the masses. Experts argued that the condo housing project is vulnerable to corruption in the construction stage and lottery process besides poor performance in the accomplishment.
Currently, the government has introduced different housing scheme including the housing association to ease the residential house problem.
The formation Goh at the initial stage was led by Getahun Nana; Gebreyesus Egata, founder and CEO of Gift Real Estate, Kefeni Gurmu, legal expert, Wubishet Jekale, Professor at Addis Ababa University and General Manager at Jekale CM Consultancy, Heyaw Terefe, Professor at Addis Ababa University, Yoseph Assefa, well known on the financial industry, Fasika Kebede, former president of Enat Bank, Amerga Kassa, former president of Nib International Bank, and Araya Gebreegziabher, former president of Wegagen Bank.