National Bank of Ethiopia Grants First License to U.S.-Backed Company



The National Bank of Ethiopia granted the first financial services license to a foreign-owned company, Ethio Lease, a capital lease provider, as the Ethiopian Government delivers on its promise to gradually liberalize the economy and create jobs.

Increasing foreign direct investment is a centerpiece of Prime Minister Abiy Ahmed’s reform agenda to increase private sector growth in a country where an estimated 75% of the 100+ million population are under 30 and the average age is 18.

Ethio Lease will address the equipment and foreign exchange shortages facing Ethiopia by providing local businesses with access to high-quality equipment, allowing businesses to grow their operations and thereby creating jobs and increasing productivity throughout the country. Ethio Lease is a wholly owned subsidiary of New York-based equipment leasing firm, Africa Asset Finance Company (AAFC).

Ethio Lease’s offerings include leases for high-quality equipment, mostly in partnership with leading original equipment manufacturers (OEMs). This equipment includes:

  • Agricultural machinery (e.g., tractors and irrigation equipment)
  • Medical equipment (e.g., MRI scanners)
  • Food processing equipment (e.g., imaging technology for coffee sorting)
  • Large IT equipment (e.g., data center servers)
  • Drilling rigs (for water bore holes, geothermal and infrastructure)
  • Power generation (e.g., solar, wind, storage and energy efficient back-up power)

AAFC will provide funding, expertise, oversight and governance to Ethio Lease, which is independently managed by an experienced team of mostly Ethiopian professionals located in Ethiopia. Frans Van Schaik, chairman and CEO of AAFC will serve as vice chair of Ethio Lease.

Van Schaik commented, “Ethiopia is poised for growth as the government takes significant strides to create jobs and improve the quality of life for its population of more than 100 million. By providing leasing solutions to growing businesses, we believe our capital will help stimulate economic activity while generating attractive risk-adjusted returns for our lenders and investors.”

There is a large, underserved market for non-bank financial institutions in Africa. While equipment finance and leasing is widely used in developed countries and has become a trillion-dollar market in the U.S., it’s a different story in other parts of the world. According to the latest Global Leasing Report by the White Clark Group, the Pan-African leasing market was estimated to be just $5.4 billion in 2015, while the International Finance Corporation estimated the Pan-African market at $40 billion in 2017. AAFC believes the increased adoption of leasing will be economically transformative and accelerate the development of many African nations and companies.

Girma Wake, vice chairman of AAFC and chairman of Ethio Lease, said, “Throughout my career, I saw first-hand the importance of having high-quality equipment in sustaining and growing a business. This equipment not only makes businesses more productive, but it allows them to expand into new sectors and to hire new workers, driving overall economic growth.”

Headquartered in New York, Africa Asset Finance Company is a non-banking financial services firm that provides equipment leasing and finance solutions. The firm’s wholly owned Ethiopian company, Ethio Lease, specializes in providing capital leases (or finance leases) to Ethiopian businesses for equipment in a range of vertical markets.

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