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Access Bank S.C. is now Zemen Bank SC. The embattled
start-up that aspires to be Ethiopia’s only
single-branch bank changed its name this week in the
latest of several delays to its opening.
The bank, which before two months had been told by
the National Bank of Ethiopia (NBE) to re-christen
itself, submitted its new name last week on Friday,
December 14, eight months after it began its
campaign to court investors.
The NBE told the bank’s founders that ‘Access’ was
an unacceptable name because a Nigerian Bank exists
with the same designation.
According to a banking industry observor, this could
have created confusion in the case that the local
bank opens a corresponding account with its foreign
namesake. Zemen bank’s lead promoter, Ermyas Tekil
Amelga, declined to comment.
“The Nigerian Bank could also sue the NBE had the
name been approved,” the observor said.
Nevertheless, there are local banks that have nearly
identical names to foreign banks: Ethiopia’s United
Bank S.C. and United Bank Ltd of Palestine, for
example, or locally-based Lion International Bank
S.C. and Lion Bank of Nigeria Plc. Access, however,
exactly matches its Nigerian counterpart.
Critics are also taken aback by the bank’s decision
to adopt a trademark with an image of a hut that
resembles the trademark of Nigeria’s Access Bank.
Nonetheless, Access Bank’s executives have finally
settled for ‘Zemen,’ literally translated to ‘Era’
in Amharic, after a prior suggestion for replacing
‘Access’ was rejected by the regulatory authorities.
‘Zemen’ seems to have satisfied both the founders
and executives at the NBE, sources disclosed.
Since promotions were launched in April 2007, Zemen
has been going through ups and downs. Its fast paced
shareholders registration process was put on hold at
the Public Notary Office two months ago on the
ground that the NBE has not given it a green light.
Before shareholders of new banks put their signature
at the office, the NBE has to send the memorandum of
association and article of the association to the
office approving it first.
Though having an acceptable name is a major
breakthrough for the bank, it has yet to be given
its business license as it has to fulfil further
requirements by the NBE.
Setting up its promotional office around Wollo Sefer,
Bole District, the bank has fulfilled the threshold
capital requirement set by the NBE with 2,700
shareholders.
Lead by Ermias, who returned to Ethiopia in 1996
after 12 years of banking experience in the US, the
group of entrepreneurs promoting access bank
envision putting the country’s banking business in a
different level. The future Zemen hopes to garner
exceptional returns introducing a new concept in the
banking business.
Despite scepticism among some bankers over its
long-term feasibility, the bank plans a strategy of
providing banking services with only a single
branch, which is unprecedented in Ethiopia.
Some, however, contend that an increase in branches
does not guarantee a bank will be profitable.
“What matters is the quality of the service that
this bank provides with its single branch,” Elias
Loha, reserve management and foreign exchange
department head at the NBE, told Fortune.
“The bank can make profits in billions if it is
competent enough to attract clients from all
corners.”
Zemen will enter a financial market that has been
delivering leaps in profit to nearly every financial
service provider. Following the financial
liberalisation of the mid-1990s, Ethiopia’s banking
system is portrayed as one of the sources of the
country’s economic growth, though non-performing
loans remain a cause for concern.
Zemen is one of five new banks - Buna International
Bank, Oromia International Bank (OIB), Berhan
International Bank and Zamzam International Bank -
hoping to tap into the record profits being made in
the financial industry. The NBE has given a green
light for these entrants to publicly sell shares in
a bid to meet the minimum capital requirements, as
Zemen has done.
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