Three Private Ethiopian Banks unite to launch the largest ATM Network to Service over 1 million Customers

Addis Ababa, Ethiopia (February 19th, 2009) – Three private Ethiopian banks signed a Memorandum of Understanding to work together to launch a wide-reaching Automated Teller Machine (ATM) and Point of Sale terminal (POS) network through which customers can withdraw cash and make payments for purchases. The agreement is the first significant cooperation between competing banks in Ethiopia’s fast-growing banking sector and promises significant gains both in quality banking technology and in cost-effective operations.

Awash International Bank S.C., Nib International Bank S.C., and United Bank S.C. are agreeingin principle to launch Fettan ATM™ Network. Fettan ATM™ network will be managed and operated by the Ethiopian based IT Service Outsourcing Company, Offshoring 2.0 Technology Services PLC, a company started by eVentive LLC CEO Ato Yemiru Chanyalew. The Fettan ATM™ Consortium, to be formed, will develop detailed business proposals to be discussed with each bank’s board prior to final decisions on investments and service implementation.

Fettan ATM™ will install over 140 ATMs and over 340 POSs across Ethiopia. There will be one ATM at every branch of the Consortium Banks, all domestic airports serviced by commercial service, shopping complexes and merchants. Ato Amerga Kassa, President of Nib International Bank says “No single bank in Ethiopia can afford to provide extensive geographical coverage and access, or create the know-how to do this properly, as a result this will lead to slow acceptance of Card Payment system by consumers, and it makes total business sense to unite

The proposal is that the founding banks will form Fettan ATM™, the Consortium founders will discuss further among other matters the share composition and distribution of the new company. Existing and new banks as well as credit unions and micro-finance institutions will be invited to join the consortium under the guidelines and procedures to be developed by the Consortium, which could help extend financial services throughout rural Ethiopia. Ato Leikun Berhanu says “It is not just about Card Payment System, the Fettan ATM™ network will provide unparalleled access and coverage for the rest of the population that are unbanked and under-banked”.

The signing ceremony was attended by:

• Ato Leikun Berhanu, President, Awash International S.C.
• Ato Amerga Kassa, President, NIB International Bank S.C.
• Ato Berhanu Getaneh, President, United Bank S.C.
• Ato Yemiru Chanyalew, Founder and CEO, eVentive LLC and Offshoring 2.0 Technology Services PLC

The Fettan ATM™ network could lead to sharing on a variety of other innovative products and services including “Debit Cards”, which the member banks’ customers would be able to use to purchase goods in specified shops and hundreds of ATMs nationwide. Ato Berhanu Getahun says, “Through Fettan ATM™ easier adoption of business and technology innovation enables participating members to offer unprecedented transaction services to their customers anywhere 24 hours a day”. Shared technology for banking and cash machine services is common in many parts of the world, since banks need to transact payments and communicate information efficiently and securely; the Fettan ATM™ Consortim plans to provide these services in Ethiopia. “There are gains from economies of scale as fixed costs are shared across more transactions and more efficient technology can be used” said Ato Yemiru Chanyalew, CEO and Founder of Offshoring Technology Services PLC.

Next steps for the Fettan ATM™ Consortium are to conduct more detailed discussions of the terms among the Consortium members, and to present their strategies and technology rollout with their respective Board of Directors. Once final details have been agreed, the Consortium will seek regulatory and licensing authority approvals to commence operations.

Source:  BDD