Home » soleRebels Founder Bethlehem Alemu launches Ethiopian bank with $116.3 million in capital

soleRebels Founder Bethlehem Alemu launches Ethiopian bank with $116.3 million in capital

by Editorial Team

Selam Mortgage Bank, a Birr 5-billion ($116.3 million) Ethiopian bank, has launched today in Addis Ababa. The bank aims to become the country’s most progressive bank. 

Selam aims to create the largest generation of homeowners in Ethiopian history by offering dynamic mortgage products currently unavailable on the market. The bank plans to finance more than 100,000 mortgages within five years, totaling Birr 200 billion ($4.65 billion) in home value, which is equal to 4.5 percent of the country’s 2020 GDP. 

The bank will start operations within five months. It has an approved capital of Birr 5 billion ($116.3 million), of which Birr 2 billion ($46.51 million) will be paid at the start of operations. By year three, the bank’s capital will reach Birr 5 billion ($116.3 million). 

The par value of one share is 1,000 ($23.25). The minimum number of shares that can be bought is 10 shares valued at Birr 10,000 ($232.55). 

Selam also aims to become a positive disruptor in home financing in Ethiopia by offering down payments of as low as 15 percent. The management also believes that this will make it easier for female-led households to gain access to mortgages. 

Ethiopia’s population of 117 million makes it the second most populous African country, with a median age of under 20. It is projected to top 181 million by 2042.  

Studies have shown that there is a severe housing crisis in Ethiopian urban centers. The housing shortage in Addis Ababa is estimated at 1.9 million units, with the demand increasing by 100,000 units each year. 

The bank also plans to sell shares to investors as allowed under current law. These include Ethiopian nationals, Ethiopian-born foreign nationals and companies fully owned by Ethiopian nationals or Ethiopian-born foreign nationals.

It may also issue long-term corporate bonds, including mortgage back securities. The timing and size of the offerings will be determined by several factors, including the level of funding required and the market’s receptiveness and sophistication.

Last year, Capital Ethiopia reported that the National Bank of Ethiopia had given Selam Mortgage Bank the green light to operate in the country.

Entrepreneurs Bethlehem Alemu, the founder of the handcrafted footwear company soleRebels, Sara Abera, Zemedeneh Negatu, Girma Gelaw and Amman Fissehazion were named among its founders.

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