Question 1

What is Eshet Microfinance Institution?

Accepted Answer

Eshet Microfinance Institution is a licensed microfinance institution operating in Ethiopia, providing financial services primarily to low and medium-income groups. The institution focuses on serving micro, small, and medium enterprises (MSMEs), women, youth, and smallholder farmers in both rural and urban areas. Eshet MFI is regulated by the National Bank of Ethiopia and operates as a share company under Ethiopian commercial law.

As of June 2022, Eshet MFI had grown to a paid-up capital of 10 million Ethiopian Birr with 20 nominal shareholders. The institution is a member of the Association of Ethiopian Microfinance Institutions (AEMFI).

Question 2

When was Eshet Microfinance Institution founded?

Accepted Answer

Eshet Microfinance Institution was established in the year 2000 in accordance with Proclamation No. 40/1996, the Ethiopian law that established the framework for licensing and supervision of microfinancing institutions. The institution was later re-registered under the amended Proclamation No. 626/2009.

The establishment of Eshet MFI was initiated by a local non-governmental organization called ERSHA (Enhanced Rural Self Help Association). ERSHA had been providing integrated rural development programs, including savings and credit services as one of its core development intervention strategies. ERSHA became the main founder of Eshet MFI, alongside five individuals who were willing to support the development goals of the NGO and were designated to administer the share company. The initial capital at inception was 225,000 Ethiopian Birr.

Question 3

Where is Eshet Microfinance Institution headquartered?

Accepted Answer

Eshet Microfinance Institution is headquartered in Addis Ababa, the capital city of Ethiopia. The institution has secured business licenses from the National Bank of Ethiopia and certificates of registration from both the Addis Ababa City Administration and the Oromia Region Trade, Industry and Tourism Bureau.

Question 4

Where does Eshet Microfinance Institution operate?

Accepted Answer

Eshet Microfinance Institution operates in both rural and urban areas across Ethiopia, with a particular focus on Addis Ababa and the Oromia Region. The institution targets communities in areas where low-income groups, smallholder farmers, women entrepreneurs, and youth-led businesses need access to financial services. [Information on the exact number and locations of branches is not publicly available.]

Question 5

What services does Eshet Microfinance Institution offer?

Accepted Answer

Eshet Microfinance Institution offers a comprehensive range of financial products designed for its target market. The institution provides both deposit and credit services.

Deposit and Savings Products include Loan Linked Savings, Compulsory Savings, Voluntary Savings, Non-Loan Linked Savings, Passbook Savings Account (PSA), Youth and Child Savings, Flexible Planned Time Deposits (FPTD), Time Deposits (TD), and Tatafata savings. The institution offers competitive interest rates, with regular voluntary savings earning 8%, special child education savings earning 10%, time deposits earning 10-14%, and staff savings earning 12%.

Credit Products include Agriculture Loans, Energy Loans, Value Chain Loans, Service and Business Loans, and Employee Loans. These products are specifically designed to meet the needs of smallholder farmers, petty traders, and micro-enterprises.

Micro-Insurance Services are provided to all borrowers except individual loan clients. Borrowers pay a 3% premium on the loan amount upfront, and the insurer waives the unsettled portion of the loan balance in the event of the borrower's natural death after proper authentication.

Question 6

What makes Eshet Microfinance Institution unique?

Accepted Answer

Eshet Microfinance Institution stands out for its roots in community development through its founding organization ERSHA, which brings decades of experience in integrated rural development. This heritage shapes the institution's strong commitment to serving the active poor and less privileged categories of the community.

The institution has developed specialized products targeting specific vulnerable groups, including dedicated savings accounts for children and youth, and specific loan products for women entrepreneurs and smallholder farmers. Eshet MFI's setup, organizational culture, policies, and procedures have been specifically designed to deliver financial services to low-income groups.

The institution's vision is ambitious: to become one of the top ten competent and leading microfinance institutions in Ethiopia by the year 2035. Its core values emphasize integrity, respect, impartiality, accountability, speedy service, confidentiality, transparency, dedication, and professionalism.

Question 7

What type of financial institution is Eshet Microfinance Institution?

Accepted Answer

Eshet Microfinance Institution is a Microfinance Institution (MFI) registered as a share company under Ethiopian law. In Ethiopia, MFIs are distinct from commercial banks and are specifically licensed to provide financial services to underserved populations who lack access to traditional banking services.

MFIs in Ethiopia operate under a specific regulatory framework established by Proclamation No. 40/1996 (as amended by Proclamation No. 626/2009 and Proclamation No. 980/2016), which sets clear mandates for these institutions. Unlike commercial banks, MFIs focus on group-based lending, promote compulsory and voluntary savings, and use joint liability, social pressure, and compulsory savings as alternatives to conventional forms of collateral. Eshet MFI is licensed by the National Bank of Ethiopia specifically as a microfinance institution to serve the financially excluded segments of Ethiopian society.

Eshet Microfinance Institution

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About Eshet Microfinance Institution in Ethiopia

Eshet Microf­inance Institution