By Yohannes Anberbir | The Reporter
In an unprecedented move, the Ethiopian Ministry of Defense (MoD) is set to enter the country’s financial sector establishing what it calls “Army Bank”.
According to the minister of Defense, Siraj Fegessa, MoD is undertaking preparations for the bank to go operational in the current fiscal year.
The plan was announced on Wednesday when Siraj presented the ministry’s quarterly performance report and program for the current fiscal year to the Foreign Defense and Security Standing Committee of the House of Peoples’ Representatives.
He also indicated that a steering committee has been established to discuss the issue with the Central Bank and devise ways on how to establish the Army Bank.
Having recalled that the ministry have been trying to establish a micro finance enterprise last year, he also explained that the main aim of forming the bank is to help military personnel develop the culture of saving and help them be owners of a house.
He also made clear that the establishment of a micro finance enterprises was not realized as the Central Bank did not give the license because of legal issues. He, however, told the standing committee that the ministry has the legal backing to establishing the bank and that the steering committee is currently working on the matter.
According to the Siraj, MoD has established the “Defense Force Foundation” whose primary task is providing basic goods and services to members of the armed forces. For this current year the foundation will be engaged in the construction of houses for army members, Siraj said.
However, the National Bank of Ethiopia (NBE) neither knows about the Army Bank nor has it received any formal request for licensing.
Public Relations head with the NBE, Alemayehu Kebede, told The Reporter that the NBE has the responsibility of delivering the right information for anyone who wants to establish a bank and the Ministry of Defense might have gained this information.
He, however, indicated that the NBE has not received any application from Ministry of Defense and if the MoD submits a formal request the matter will be dealt with based on the legal work procedure.