Ethiopia: World Bank Supports Efforts to Improve the Capacity of the Financial Sector

Contacts

In Washington: Ana Luna (202) 473 2907

alunabarros@worldbank.org

In Addis Ababa: Gelila Woodeneh (251-1) 662 77 00

gwoodeneh@worldbank.org

 

WASHINGTON, June 22, 2006 – The World Bank’s Board of Directors approved today a US$15 million grant to Ethiopia to support the formulation and implementation of policy and institutional reforms in the country’s financial sector.

 

The Financial Sector Capacity Building Project for Ethiopia assists in building the foundation for a more transparent, well-governed, well-regulated, and competitive financial sector that can allocate resources to the private sector more effectively and efficiently, and help to ensure better access to finance for all Ethiopians.  

 

The project will help strengthen the human and institutional capacity of the National Bank of Ethiopia to enable it to effectively carry out its key functions of regulating and supervising financial intermediaries, undertaking economic research, and formulating and implementing monetary policy. This component provides financial and technical assistance to build capacity in: banking and insurance regulation, supervision and corporate governance of financial institutions; economic research, policy formulation, and implementation functions; internal audit and finance; legal; information technology; human resource management; and bank modernization. It will also strengthen the financial sector infrastructure by providing financial and technical assistance for payment system modernization; improving the credit information center, developing the capital markets infrastructure, and setting up an asset/collateral registry to facilitate secured loan transactions.

The project will also support efforts to develop new financial products that are critical to improving access to finance and fostering the broadening and deepening of Ethiopia’s financial sector. This includes finance for housing, leasing and small and medium enterprise; agricultural risk insurance/management; and other products, such as a venture capital funds and credit cards.

Finally, the project will enhance professional skills in the financial sector by focusing on in-country training capacity—including strengthening of the Ethiopian Institute of Banking and Insurance— to build up the skills of financial sector professionals (bankers, insurers, securities brokers and issuers, accountants and auditors, among others); and building up the capacity of financial sector professional associations.