NewInvestment

Manner of Equity Investment by Foreign Nationals of Ethiopia Origin or Organization in Microfinance Business (Directive No. 302/2020)

National Bank Of Ethiopia302/2020

Summary

This directive outlines the rules and regulations concerning equity investment by foreign nationals of Ethiopian origin or organizations in the microfinance business within Ethiopia.

Who's affected

Foreign nationals of Ethiopian origin or organizations seeking to invest in the Ethiopian microfinance sector.

Action required

Review the directive to understand the specific requirements, limitations, and procedures for equity investment in the microfinance business.

Key points

4
  • Directive specifically addresses equity investment in microfinance.
  • Focus on foreign nationals of Ethiopian origin and their organizations.
  • Governed by the National Bank of Ethiopia.
    • Show 1 more
    • Specifies conditions, rights, and restrictions for such investments.

Requirements

4
  • Equity investment must be made by foreign nationals of Ethiopian origin or by organizations established by them.
  • Adherence to specified capital requirements for microfinance institutions.
  • Compliance with reporting and disclosure obligations.
    • Show 1 more
    • Obtaining necessary approvals from the National Bank of Ethiopia.

Rights and permissions

3
  • Right to invest equity in the microfinance business under specified conditions.
  • Right to participate in the management and governance of microfinance institutions as per investment share.
  • Right to repatriate profits and capital in accordance with foreign exchange regulations.

Restrictions

3
  • Restrictions on the percentage of equity ownership by foreign investors.
  • Limitations on the types of financial instruments available for investment.
  • Prohibitions against certain business practices that may undermine the stability of the microfinance sector.

Penalties

2
  • Penalties for non-compliance may include fines, suspension of investment activities, or revocation of licenses.
  • Administrative sanctions as determined by the National Bank of Ethiopia.

Objectives

3
  • To regulate foreign equity investment in the microfinance business by Ethiopian-origin foreign nationals and organizations.
  • To ensure compliance with established investment criteria and procedures.
  • To foster a conducive environment for foreign investment in the microfinance sector.

Organizations

1
  • National Bank of Ethiopia
Original sourcehttps://justice.gov.et/en/directives/manner-of-equity-investment-by-foreign-nationals-of-ethiopia-origin-or-organization-in-microfinance-businessdirective-no-302-2020/
View source