The Ethiopian Deposit Insurance Fund (EDIF) has collected 5.2 billion Birr in premiums from member financial institutions over the last nine months, representing an 11.1 percent increase compared to the same period last year, Desalegn Ambaw, CEO of EDIF, announced.
In a press conference he gave today, Desalegn stated that the fund now provides insurance coverage of up to 100,000 Birr per depositor per member institution.
“Some 97 percent of bank depositors are currently covered by the deposit insurance scheme,” the CEO noted, adding that 31 banks and 55 microfinance institutions are enrolled as members.
Of the total premiums, 51.3 percent or 2.67 billion Birr was collected from private banks, while 47.5 percent or 2.47 billion Birr was collected from the Commercial Bank of Ethiopia, he said.
He added the remaining 1.2 percent or 59.49 million Birr was collected from microfinance institutions.
According to him, EDIF’s 12.11 billion Birr investment portfolio, standing at over 92 percent, is allocated to treasury bonds, generating a profit of 689.45 million Birr over the past nine months.
“Our mission is to protect depositors and contribute to the stability of the financial system by assessing and collecting premiums, investing and managing EDIF’s resources, and reimbursing insured depositors,” he said.
We are committed to serving as a reliable and trusted deposit insurance fund, he added.
EDIF Operations Director, Merga Wakweya, on his part emphasized the fund’s role is to ensure stability of the financial system by protecting depositors in the event of a bank’s or microfinance institution’s failure.
Accountable to the National Bank of Ethiopia (NBE), the EDIF will reimburse insured depositors in case of financial institution failure and invest in secure government securities.
This initiative marks a significant step in bolstering public confidence and stability within Ethiopia’s financial sector, aligning with international best practices in financial safety nets.
The EDIF aims to protect depositors and mitigate the risk of bank runs, contributing to a more resilient financial system for sustained economic growth.
Source: ENA
