Co-op Bank eyes Ethiopia joint venture

Corporate News

Co-op Bank managing director Gideon Muriuki. Photo/FILE 

By  SIMON CIURI

Co-operative Bank is seeking to enter the Ethiopian market through a joint venture.

The bank’s chief executive, Gideon Muriuki, said on Friday the Ethiopia entry will be in addition to the planned venture into Tanzania and Uganda, which he estimates will cost Sh1.8 billion ($20 million).

“Just like in Uganda where we are planning to establish our presence through joint ventures, the same model will apply in Ethiopia,’’ said Mr Muriuki.

Co-operative Bank already has a presence in South Sudan where it entered through joint ventures with the local co-operative movement.

Its bid to enter Ethiopia, which frowns upon foreign investment in its financial sector, will be helped by a special agreement former president Mwai Kibaki signed with Ethiopia’s Prime Minister Hailemariam Desalegn allowing Kenyan lenders to establish offices in the country.

Ethiopia restricts foreign investors from venturing into its telecommunications, banking, media, retail, insurance, and electricity sectors, only allowing selective participation.

The restriction has slowed the expansion agenda of Kenyan banks, which have opened subsidiaries in the region to cut reliance on the local market.

Lenders like Equity Bank had outlined ambitions of opening shop in Addis Ababa in the hope that Ethiopia would open its financial services sector to foreign investors.