News

Coopbank has started CCF for first time in Ethiopia

Cooopbank launches Collateralized Commodity Financing.

For the first time in Ethiopia, the Cooperative Bank of Oromia has launched Collateralized Commodity Financing (CCF). This loan is believed to have a wide range of benefits for the community as farmers are no longer obliged to sell their crops during low seasons. Depending on its mission and rooting its foundation in the community, the bank is expanding its horizons by providing a better quality of service to its customers.

The newly launched Collateralized Commodity Financing service is a short-term credit secured against stored commodities as collateral. The commodity can be kept in either a warehouse operator's or a borrower's warehouse.

The two forms of CCF services are the one-time CCF loan facility and the revolving CCF loan facility, which ensure that the bank can satisfy its clients.

Beneficiaries of the Collateral Commodity Financing service include stakeholders, farmers, processors, cooperatives, and dealers.

The product has been officially inaugurated today by financing the first warehouse receipt 000001 to Hetosa Farmers Cooperative Union.

 


Fund-raising has been organized by the Coopbank Employees to support Late Artist Hachalu Hundessa’s Family

Following the death of the late iconic hero Hachalu Hundessa, employees of the Cooperative Bank of Oromia have organized a fund-raising effort to support his family and the management of the bank have arranged for the purchase of its equivalent in share of the bank. Employees from branches, headquarters, and district offices have contributed a total of ETB 1,456,500.00 for the cause.
The bank's president, Mr. Deribie Asfaw has presented the share certificates for Wabi Hachalu Hundessa, Milki Hachalu Hundessa, and Gifti Hachalu Hundessa.


Coopbank launches Ethiopia’s first digital lending product named Michu

Cooperative Bank of Oromia & Kifiya Financial Technology announce partnership for the launch of Ethiopia’s first uncollateralized digital lending product, Michu.

Addis Ababa, Ethiopia, January 12, 2022, Cooperative Bank of Oromia (Coop bank) and Kifiya Financial Technology (Kifiya), today announced a new partnership and launched a digital lending product named Michu.

Coop bank’s Michu is Ethiopia’s first uncollateralized digital lending product, powered by Kifiya’s Qena, an AI-driven digital lending platform.

The partnership allows Coop bank to tap into Kifiya's digital lending technology and give Kifiya the ability to leverage Cooperative Bank of Oromia distribution and financial capacity. The Bank will offer lending solutions targeting Micro, Small, and medium businesses (MSMEs), providing access to credit, through groundbreaking and cutting-edge credit scoring systems.

Research shows that Ethiopia’s MSME Financing to GDP Ratio was 2% in 2020. This ratio is lower than South Africa’s 14% and Kenya’s 6% in 2020. Ethiopia’s poor ratio is attributed to the crowding-out of credit by the public sector and high requirements for a loan to MSMEs by Micro-Finances and Commercial Banks.

Financial institutions place high requirements partly due to a lack of credible credit ratings. Michu’s ease of access enables users to apply for loans and receive decisions based on credit scoring logic. The loan application process from eligibility and verification to analysis, scoring, and loan disbursement gets completed within a few minutes.

“We are excited to join hands with Kifiya as we expand our digital financial offerings and deliver support to the financing needs of micro and small businesses that are often neglected but represent a significant part of the economy.”, says Deribie Asfaw, President of Cooperative Bank of Oromia.

“Today’s partnership with Coop bank marks an exciting era for the Ethiopian Digital Economy as Kifiya’s Qena technology heralds uncollateralized digital lending in the country. With the help of our AI-powered credit scoring digital lending platform, we hope to address the needs of uncollateralized finance in MSMEs sector in Ethiopia”, says Munir Duri, CEO of Kifiya Financial Technologies PLC.

Michu has offerings, both loans in the form of loans and overdraft facilities, for Micro, Small, and Medium Businesses. The Microloans are aimed towards the working capital needs of roadside traders and micro businesses with a maximum loan amount of 30,000 ETB and a repayment period of 1-4 months.

Whereas, the MSME loans targets traders at small and medium levels with a maximum loan amount of 150,000birr and a repayment period of up to one year. Moreover, the loans are intended to cover the working capital of the MSMEs.  Michu also has another product targeted at employees of various organs called Consumer Loan.

The non-collateral digital lending product is a new desired loan service that is innovative and makes the loan service process swift, non-collateral, easy to access at anytime and anywhere. The product uses data to determine credit worthiness as well as a flexible payment method.  Michu digital lending product is expected to increase Coop bank borrowers by 30% during the pilot period.

For more information please contact:

Cooperative Bank of Oromia (Coop bank)

Mr: Abdi Fekede

Position: Director MSME

T: +251 911026530

E: [email protected]

Kifiya Financial Technologies PLC

Ms: Lewam Assefa

Position: Head Marketing - Qena

T: +251913 028610

E:  [email protected]

About Cooperative Bank of Oromia

The Cooperative Bank of Oromia was legally established and registered on October 29, 2004, in accordance with article 304 of the commercial code of Ethiopia and officially inaugurated on March 08, 2005.

The emerging financial services were primarily focused on wealthy individuals and large enterprises mainly in urban areas. The rural population, particularly farmers, small businesses owners, and large communities were excluded from financial services. Thus, the Cooperative Bank of Oromia was set up to correct this market failure and to overcome the associated problems of asymmetric information in favor of borrowers.

More than 67% of the bank share is owned by cooperatives, associations, individual farmers, and small business owners. The bank has been operating with the prime objective of transforming the livelihoods of farmers, micro, small, and medium business enterprises by enhancing their access to finance.

In doing so the bank has made a tremendous change for the past fifteen years in transforming farmers, MSME’s business, and other parts of a community that is financially excluded.

Using Michu digital lending platform Cooperative Bank of Oromia provides access to non-collateralized loans for Micro, Small, and Medium Enterprises. Michu is a credit score-based digital lending platform that addresses risk components for the bank. The credit scoring system provides a means of systematically and objectively assessing the risk and growth potential of MSMEs, thus allowing the platform to make a risk-based decision and reducing management and operational costs of small amount loans.

About Kifiya:

Kifiya financial Technologies was established in 2010 and operational in 2013 with the vision to make transactions simple affordable, secure, and within reach through building integrated and scalable technology and distribution infrastructures that enable access to financial and non-financial services.

Kifiya also built the capacity to develop innovative products and services that can bring value to consumers, cooperate entities, and the government. Its technology focusing areas include e-commerce, Logistics, Payment & Distribution services, Digital Agricultural solutions, and Digital Lending services.

In partnership witKifiya’s has over the past five years been developing AI-based credit scoring and digital lending platform (Qena), and appropriate products for the MSME sector to enable financial institutions to provide credit to individuals, micro, small and medium enterprises. The platform enables MSMEs, and individuals to apply and manage their credit through mobile or web and get responses in a timely manner.


Coopbank Launches Prize Linked Savings

The Cooperative Bank of Oromia has launched a prize-linked savings program with enticing prizes. For the first time, the bank began the program with the goal of encouraging people to save, and at the same time win attractive prizes.

 

On top of the high interest rates calculated for; Sinqe- Women Savings Account,  Gamme- Junior Savings Account, Youth Savings Account, Farmers Savings Account and Regular Savings Account, the bank is offering lotto numbers that will make customers eligible to win exciting prizes. Any eligible customer who saves for the program period starting at ETB 350, Coopbank of Oromia has prepared a total of 99 prizes! 1 two-bedroom apartment, 1 Suzuki Dzire 2021 model automobile, 3 three-wheel drives, 30 TVs, and 65 smart mobile phones that will be casted by lottery system.

The project will encourage people to save more since the more they save, the more lottery numbers they will be able to obtain, increasing their chances of winning. The bank has invested a significant amount of money in this program, which is expected to achieve two primary objectives. The first is that, because saving is a vital quality and people can utilize their money whenever they wish, such as in an emergency or to start a business, this program instills the habit of saving in our culture. The second is that 99 lucky people who use one of the aforementioned accounts will be chosen at random to win one of the attractive prizes.

 

 

 

You may go to a nearby branch of Coopbank to start saving today. Save for a better future.


Coopbank Introduces Farmers’ Savings Account

Ethiopia’s population is believed to be about 108 Million based on some estimates. Around 80-85 percent of its inhabitants live in rural areas and are engaged in agriculture. Frequent drought, lack of training and equipment for farmers, and poor access to markets make it difficult for them to earn a living. Beyond all, most of the problem occur due to the extravagant nature and low-level saving habit of the farmers.

During the harvest time, the farmers gain the yield and hence they are on the peak period. As a result, in this peak period, the farmer’s consumption and other expenditures reach the highest level although most of them are extravagant purchases. However, the harvesting period is not a peak in the price of their products as well as their savings, but a peak in the consumption, and hence they face difficulty during the lean period (post-harvesting time) and next year planting times.

Cooperative Bank of Oromia has become the first bank to provide Farmers' Savings Account with better interest and attractive rewards as well as interest free banking services to the community. As it is clearly stipulated on its mission of rooting in a larger community, the bank is able to develop a new product that for the first time, said to help people engaged in agricultural activities such as farming, fishing and animal husbandry etc. The product is believed to revolutionize the saving culture and bring a difference in the livelihoods of the farmers.

Farmer’s Saving Account is a saving account that is uniquely designed for farmer’s bearing attractive interest rate paid monthly and offers various rewards on a lottery system mainly farming tools such as Tractors. The product is designed to encourage the unbanked and underbanked farmers save and leverage the enormous untouched potential, and ultimately transform their living.

 


OCFU’s “One-Koo”Modern Coffee Factory Inaugurated

Oromia Coffee Farmers Cooperative Union inaugurated One-Koo coffee processing plant in Galan town whose construction cost 48 Million ETB financed by Cooperative Bank of Oromia. The inauguration ceremony was attended by the president of Cooperative Bank of Oromia, Obbo Deribie Asfaw, several other officials, and the interested stakeholders.

This coffee roasting, grinding & packaging factory produces 420Kgs of coffee per hour for local and international markets. Oromia Coffee Farmers Cooperative Union can now export value-added products & earn more proceeds than raw coffee exports. It will also create an additional 200 jobs.

Oromia Coffee Farmers Cooperative Union, one of the highest exporters of coffee in Ethiopia, has more than 400 cooperatives and more than 557,000 farmers as a member. The Cooperative Union is one of the major shareholders of the bank.


Coopbank’s Transitional Head quarter Construction Well in Progress

Construction of Cooperative Bank of Oromia’s transitional headquarter, a 16-story building, which was started in the last fiscal year, is advancing as planned and is assumed to be complete in the coming year.

The transitional headquarters, which is underway around Bole Rwanda, in Addis Ababa(Finfinne) is being built by Chinese Contactor China Wu Yi Co. Ltd and Image consultancy PLC the consultant firm.

At the end of August 2020, the construction of the curtain wall is under progress, air ventilation and fire sprinkler system are also under progress while gypsum work has been completed.

This transitional headquarter building will house its own special branch in its lower floors while the Bank’s Head Office staff populates the upper floors

The bank is making the construction of multi-purpose building project at Waliso and Jimma and will continue constructing own buildings in various parts of the country


Cooperative Bank of Oromia’s profit rose by 85.47pc to ETB 1.42 billion

Cooperative Bank of Oromia made a record operating profit of ETB 1.42 billion in the 2019/20 fiscal year, a rise of 85.47pc from the last fiscal year. It is the highest in the previous 15 years journey of the bank, making it the third most profitable private bank in the country. The earnings per share for the year became 47pc, up from the last fiscal year’s 36pc.

The bank attributed the impressing operating profit performance of during the period mainly to our e­ffective revenue and expense management practices.

During the fiscal year, the bank was able to generate a revenue volume of ETB 5.74 billion, which grew by birr 2.03 billion compared to the same period the previous year, mainly attributed to the growth of the bank’s loans and advances as an interest income stood at ETB 4.16 billion, 72.4pc of total revenues.

Consolidated non-interest income generated was ETB 1.58 billion, which grew by 75.77pc from the last fiscal year. The bank mainly attributed to increased income of commission and service charge from Forex and IFB income.


Coopbank Set off New Strategy

Toward realization of its vision “To be the leading private bank in Ethiopia by 2025”, Coopbank has recently set off a new strategy.
Obbo Deribe Asfaw, President of the bank says that the last strategy period (2016-2020) laid a strong foundation for the bank’s journey towards its set vision.
According to the President, the new strategy which is planned to be implemented soon will not only hugely transform the bank, but also mobilizes the resources to move the country’s economy forward.
According to the bank’s president, another issue that the bank will focus on in this new strategic era is the creation of fixed asset. Amongst many, it is planned to start the construction of the bank’s head quarters next year in Finfinne and construction of several other buildings in major cities of the country, in particular.
On the other hand, “if, unexpectedly, a government’s economic policy introduces foreign financial institutions to the country’s financial market, the new strategy is said to help foresee the bank to move on track regardless of the expected stiff competition that follows. In line with this, the new strategy also takes into account the introduction of other local banks under formation and Islamic banks’ impact on Coopbank,” says Obbo Deribie.
He further adds, “another major focus of the strategy is an advancement of technological capability and the human resource development, which are believed to be the backbone in the advancement of the bank.


What we are doing during the Covid -19 Outbreak

Since the outbreak of a deadly disease, COVID-19, Cooperative Bank of Oromia has been undertaking various measures and hugely contributed to the efforts being made to combat its spread nationwide. Among many, inter alia,

Donation and Awareness Creation

  • Donated ETB 5 million to the national committee established to combat COVID-19 via Ministry of Health.
  • Donated ETB 3 million to the Oromia Regional State to help combat the virus.
  • Temporarily gave its buildings to Oromia Regional State in Nekemte and Kuyu towns for this purpose to be used if the pandemic gets out of control.
  • Created awareness on several media about the virus to the general public and all branches of the bank have been engaged on the awareness creation activities.

Employees of the Bank

  • Procured and distributed to its branches and work units 26,000 facemasks that worth more than 3 Million and more than 4000 litres of sanitizer and alcohols worth about ETB 1 Million.
  • Arranged a shift service for its staff so that only few people can stay at work units while others be at home.
  • Provided different kinds of leave arrangement for its Staff:
    • Paid Leave
    • Advance Leave
    • Vulnerability Leave – For pregnant women as well as employees who have compromised immunity.
  • In the process of arranging Transportation services for the Staff living in Addis Ababa and major towns all over the country.
  • Employees of the bank across the country are supporting the prevention activities in their respective localities both financially and voluntarily.

Preparations at branches

  • Prepared hand washing materials and water at the gate of all the 416 branches of the bank.
  • Enforced physical distancing of customers as they come to the branches to avoid the risk of infection to our customers.

Fees and Interest Rates

  • Waived all fees from digital banking platforms including; ATMs, Coopay (Mobile Banking)
  • Waived LC extension fees;
  • Reduced Interest Rates, especially to the sectors largely hit by the pandemic. Interest rate reduction up to 4% has been made on the following sectors;
    • Cooperatives
    • Domestic Trade Service
    • The Hotel Industry
    • Manufacturing
    • Agriculture
    • Merchandise
    • Vehicle Loan
    • Building and Construction, Machinery
    • Import
    • Personal Loans/Mortgages