The Transparent Pricing Initiative in Ethiopia has published standardized pricing data from 17 microfinance providers, representing an estimated 95% of Ethiopia’s microloan borrowers. Launched in 2011 the Initiative is delivered in partnership with the Association of Ethiopian Microfinance Institutions (AEMFI) and is funded by MicroNed.
Microfinance in EthiopiaThe industry serves more than 2.3 million active borrowers and has a gross loan portfolio of 10.2 billion ETB (approx. 574 million USD) as at December 2011. Demand for microfinance service in Ethiopia is believed to be very high, with some studies estimating that only a third of the total demand for microfinance service in the country has so far been met. One of the challenges for microfinance institutions is raising capital funds to meet such demand.
The Ethiopian microfinance regulatory environment is characterized by a long standing prudential framework and a dedicated supervisory directorate at the Central Bank. This directorate has been mandated via proclamation no. 626/2009 to license, supervise and regulate all registered microfinance institutions in the country. It was also entrusted with ensuring the soundness of the industry via issuing directives pertinent to microfinance business.
Although specific truth in lending legislation does not exist, NBE directive No. MFI 12/1998 states that it is the responsibility of the Board of Directors of each MFI to set the lending interest rate. The directive however does not to specify how the interest rate should be calculated or communicated.
Ethiopia Institutions
| Institution | # Borrowers | Portfolio (US$) | Products | Transp. Index | Participating Since | Age of Data |
|---|---|---|---|---|---|---|
| ACSI | 682,200 | 103,172,000 | 5 | 87 | 2011-Dec | 158 mos. |
| ADCSI | 176,100 | 30,846,000 | 2 | 46 | 2011-Nov | 159 mos. |
| BG | 47,000 | 4,048,000 | 4 | 61 | 2011-Dec | 158 mos. |
| DECSI | 361,000 | 96,304,000 | 7 | 103 | 2011-Dec | 158 mos. |
| Dire | 4,900 | 828,000 | 4 | 47 | 2011-Dec | 158 mos. |
| DMCPSC | 1,200 | 69,000 | 1 | 44 | 2011-Dec | 158 mos. |
| Eshet | 18,800 | 2,392,000 | 3 | 85 | 2011-Dec | 158 mos. |
| Harbu | 22,400 | 1,757,000 | 2 | 67 | 2011-Dec | 158 mos. |
| Meklit | 12,200 | 1,395,000 | 4 | 41 | 2011-Dec | 158 mos. |
| Metemamen | 10,500 | 650,000 | 6 | 67 | 2011-Dec | 158 mos. |
| OCSSCO | 502,700 | 69,565,000 | 3 | 52 | 2011-Dec | 158 mos. |
| OMO | 323,600 | 31,385,000 | 4 | 62 | 2011-Dec | 158 mos. |
| PEACE | 17,200 | 2,462,000 | 3 | 75 | 2011-Dec | 158 mos. |
| SFPI | 33,600 | 2,750,000 | 3 | 48 | 2011-Dec | 158 mos. |
| Sidama | 53,400 | 1,162,000 | 6 | 41 | 2011-Dec | 158 mos. |
| Wasasa | 49,300 | 5,798,000 | 4 | 64 | 2011-Dec | 158 mos. |
| Wisdom MFI | 45,300 | 5,500,000 | 6 | 61 | 2012-Mar | 155 mos. |
