Building Dreams: The Story of Ethiopiaโs First Mortgage Bank
In the fall of 2021, Ethiopia witnessed a remarkable shift in its banking landscape with the launch of Goh Betoch Bank, the first specialized mortgage bank in the country. The bank's founding came as a direct response to Ethiopiaโs critical housing shortage, which has been particularly acute in urban areas like Addis Ababa. The story of Goh Betoch Bank is one rooted in innovation, addressing a crucial gap in the market, and spearheading a transformation in how Ethiopians access homeownership.
The idea behind Goh Betoch Bank began to take shape as early as 2018, with a group of 11 visionaries, including individuals from diverse backgrounds such as banking, investment, and academia. These founders identified a glaring need: Ethiopians, particularly those with low to middle incomes, struggled to secure long-term financing to build or purchase homes. The banking system was not equipped to offer the kind of mortgage loans necessary to address the growing demand for housing. Real estate developments were booming, but financing options were limited, leaving many Ethiopians unable to buy homes despite increasing urbanization.
Driven by this vision, these founders secured a monumental 1.1 billion birr in initial investments from 6,658 shareholders. In a relatively short period, Goh Betoch Bank officially opened its doors in October 2021 with 521.5 million birr in paid-up capital. Among the distinguished individuals leading this charge were Getahun Nana, who became the chairman of the board, and Mulugeta Asmare, a highly experienced banker, who took on the role of CEO. With the support of Vice Chairperson Gebreyesus Igeta and other executives, the bank embarked on its mission to provide accessible mortgage financing across Ethiopia.
The launch event itself was an auspicious one, attended by high-profile government officials, including the Mayor of Addis Ababa, Adanech Abiebie. During the event, Mulugeta Asmare outlined the bankโs purpose, stating that Goh Betoch Bank would provide financing options tailored specifically to address the needs of low- and middle-income citizens who had previously been excluded from the housing market. The mayor lauded the bank for its potential to make a significant impact, highlighting how it aligned with the city administration's goal of alleviating the housing crisis.
The core vision of Goh Betoch Bank has always been to democratize housing by offering long-term loans with favorable interest rates, allowing more Ethiopians to own homes. The bankโs services are not limited to individual homebuyers. Goh Betoch Bank also works closely with real estate developers, providing financing that helps accelerate the construction of new housing projects. This two-pronged approachโoffering both direct mortgage loans to individuals and development loans to buildersโplaces Goh Betoch Bank in a strategic position to impact the housing sector on a broad scale.
Beyond loans, the bank is also involved in the actual construction of houses, which are then sold or rented to individuals based on their preferences and financial capacities. This unique model allows Goh Betoch Bank to actively shape the real estate landscape, ensuring that its projects directly serve the housing needs of Ethiopia's growing urban population.
While Goh Betoch Bankโs core mission is centered on mortgages, its services have expanded over time. The bank offers various savings products, including a โMortgage Savingsโ program, which helps individuals save money specifically for housing purchases. Customers can also access traditional banking services like deposits and personal loans. In the coming years, Goh Betoch Bank aims to incorporate more digital banking services, modernizing its offerings to keep up with technological advancements in the sector.
As Goh Betoch Bank continues to evolve, it plays an increasingly pivotal role in Ethiopiaโs broader economic development. With an eye on the future, the bank has forged partnerships with local governments, real estate developers, and even international investors to ensure the continued growth of its housing projects. There are also plans for regional expansion, with the bank seeking to extend its services to other cities and regions throughout Ethiopia.
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