Enat Bank: Empowering Women of Ethiopia

Interview with Meaza Ashenafi, Chairperson of Enat Bank

What is your overview of the banking sector and what is your outlook for 2014 and onward?

In Ethiopia, private banks started to flourish since 1994. Before 1994, there were no private banks; there were three public government-owned banks. But after 1994, sixteen private banks have been established and I see this as a big opportunity, because as you know, finance is key and Ethiopia is one of the most under-banked countries by sub-Saharan standards. I see this as a great opportunity and also a great leap forward.

Can you give us a brief history of Enat Bank and what were some hurdles that faced the establishment of this financial institution?

The story of Enat Bank is quite interesting and I also believe it is quite unique in many ways. It’s unique because professional and business women came together and made a difficult decision to establish a bank. When we came up with this idea, many people thought it was a joke because when people think of women and banking, they usually think in terms of micro-finance. But here, we wanted to change the narrative; we wanted to change the story about women and finance, and women and economic empowerment. So it was eleven women who came together and decided to start this bank. It was a challenging journey, particularly for certain reasons. Capital was a big challenge but we managed to pull together the required funds and open the bank.

Enat means mother and it probably took you a bit of time to come up with the name. What was the reason behind choosing that name for the brand?

Initially our proposed name was Women’s Bank of Ethiopia and fortunately for us, that name was not approved by the Ministry of Trade that approves trade names. Initially we were quite discouraged because we really advertised ourselves with that name but then we sat down and reflected and brainstormed and consulted other people. That is how we came up with the name for Enat Bank. It became a brand and it became quite powerful because in Ethiopia, the literal meaning of Enat is “mother” but it goes beyond that. It’s about loyalty, care, embracing, foundation, and even about earth. Even in our sayings, even if a man is good, they say he is enat. It is very profound; so, we are very happy with that name. This project has a lot of sympathy from the public, the government has also encouraged us, the presence of the Prime Minster and the First Lady of our country at the launching ceremony of the Bank is a demonstration of their commitment to women’s economic empowerment as a key input to national development.

What are some of the products and services that you offer your customers?

We provide regular banking services including credit, deposit facilities, and saving facilities and so on, but we also have a special window for women. For example, if we require 100% collateral for a man who walks in to submit a project for a loan, we require only 70% for women. We also have plans to establish a risk fund in the future, so if women come up with an innovative idea they should be able to get the loans that they require when the bank builds up this capital base. We also have a product called “Enat’s Choice” which is a loan that is provided to reduce women’s burden at the household level. It encourages women to access finance to purchase household materials. These are some of our products but I will provide you our brochure explaining the products and facilities that we have.

How is the business at Enat so far? What type of growth have you accomplished in all segments of your business?

The bank was launched just last March but the progress so far has been quite promising. We have already started to register a profit during the last two months and that’s big news. In terms of the bank’s objective, 64% of our depositors are women and 83% of our fund is going to women in terms of our credit facility. So, the trend is quite encouraging and positive.

What makes your brand unique in comparison to the rest of the competition in this marketplace?

Number one, we aspire to be leading in terms of quality customer service. Secondly, we also want to use and depend on technology. We are working on our core banking and we also want to provide technology-based services including mobile banking. We want to collaborate as much as possible with international technology-based institutions to ensure a knowledge transfer. Our bank is broad-based in terms of its customers; although our niche market is women, we want to work with everybody, especially women, to cultivate start-up capitals. There is also a great deal of public support because it has this development component. That is why I think we have not a competitive but a cooperative advantage.

It usually takes time to turn a profit but you did it in such a short period. Do you have any plans to expand into other branches or financial services or products?

If terms of branches, we have already opened three branches and our fourth branch will be open very soon. Within the next six months, we plan to open six branches. All of our branches are named after women who have accomplished something in this country. For example, the branch you are going to visit is named after an empress called Empress Taitu who was very famous in Ethiopia. Our second branch is named after Queen of Sheba and our third branch is named after a lady called Dr. Abebech Gobena, a philanthropist woman well-known throughout the world. We also want to dedicate different branches to different prominent Ethiopian women.

What challenges do you see facing this banking industry?

As I said, there is a great opportunity for the banking sector in Ethiopia but there are also definitely challenges. For example, one of the challenges is that it is not very easy to mobilize deposit because now we have 16 private banks and 3 government banks. The Commercial Bank is the biggest bank and has branches all over the country. Attracting depositors is not easy so it requires an innovative approach and extra effort.

Secondly, we have still not yet harnessed the technological possibilities for mobile banking. Countries such as Kenya are quite a bit ahead of us and there are lessons we need to learn from these governments. Plus, in terms of the legislative framework and the required infrastructure, we need to catch up in these areas. I’m sure you have heard about the 27% requirement from the banks that they have to invest in government bonds whenever they give a loan. That is a double-edged sword because of course we need the development and the government needs to work on the infrastructure, but from a banker’s point of view they complain about this because it creates strain even on the bigger banks. These are some of the challenges. Human resources is also a challenge because this is a new area and there is tight competition for qualified experts. We have some challenges in those areas, however we are also luck since we mange to attach some of the best talents in the market.

Can you give us your vision for Enat Bank in the next five or ten years?

In the next five or ten years, I think Enat Bank will be one of the biggest banks in this country. That is what I think. We will have branches in different parts of the country. I am not able to say what the number of branches will be because we are still working on our long-term strategic plan. I also see Enat Bank will be connected in terms of technology and strengthened in terms of technology-based services. I think we will also be well-known globally; by that time there will be lots of experience at Enat Bank and we will be able to share not only in the finance sector but in general in the development arena.

Could you give us a message to inspire women and empower them?

This is connected to my last point in terms of as far as I know there is no bank that was established exclusively by women and also majority-owned by women. I don’t know of any other commercial bank that has made such an effort to promote inclusive banking in a practical way. There are micro-financers. In that regard this bank is unique. This bank is unique and we did this deliberately because we wanted to emphasize that women’s economic empowerment is important, that if Africa is to develop and if we talk about sustainability, we need to bring aboard women and have women participate. Research empirically shows the link between women’s economic empowerment and sustainable development so this is a type of pilot project to show that if women have access to finance, if they have access to advisory services, and if they are supported, they can make a difference, not only at the household level but also at the national level.

Another major lesson that one can filter form our experience is that, women can make a selfless committeemen to serve their societies and this has to be noticed and emulated. All eyes are on this Bank and we will succeed!

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