Banking in Eritrea
Encyclopedia
Modern banking in Eritrea started with the coming of Italians. In 1914, Banca d' Italia established its branches in Asmara
and Massawa
. And by the end of the Italian colonial period in 1941, there were four banks and one credit union operating in Eritrea. These banks were; Banca Di Napoli: Banca d'Italia, Banca Di Roma, Banca Nazionale del Lavoro and a credeit union called Casa di credito. These banks had branches in 6 Eritrean cities: Asmara, Massawa, Keren
, Adikeyh, Decamahare and Assab.
However, all the banking services, like other services, were only serving the Italians. It was with the coming of the British in 1941 that banking service extended to the local people. The Barclay Bank established branches in Eritrea shortly after the British established their presence in Eritrea and extended the services to the local people.
Private banking continued in Eritrea during the federation and the Haileselase regime. In 1974, when the Degue came to power, like other private sectors establishments, the banking sector was nationalized. All banking services were put under the Commercial Bank of Ethiopia
, which monopolized the banking service. After independence, the Commercial Bank of Ethiopia Branch in Eritrea was formulated to be the Commercial Bank of Eritrea
. The Bank of Eritrea
was also established with a role of Central bank.
At present there are no privately owened banks in Eritrea. Previously The Augaro Bank was in operation but quickly shut down after operations began.
Branches of the Commercial Bank of Eritrea and the Housing and Commerce Bank exist in the larger cities and towns of every Region
of Eritrea. The Agricultural and Industrial Bank of Eritrea, the Eritrean Investment and Development Bank has also branches in the major cities of the regions,
The central bank
of Eritrea is the Bank of Eritrea
(BoE). The BoE is responsible for regulating the lending and deposit interest rates while keeping a handle on inflation and other macroeconomic indicators. As of yet the BoE has not been able to control inflation, which has led to tremendous rates of inflation, up to 23%.
The Commercial Bank of Eritrea
The Commercial Bank of Eritrea
is the dominant bank in the country. It owns nearly 80% of all banking sector assets in the country. It is a state owned bank.
Housing and Commercial Bank of Eritrea
This is the second biggest bank in current operation. The Bank was established in 1994 to provide banking service to residential buildings. Later, in 1996 it extended its services to full commercial services.
The Eritrean Investment and Development Bank
The third bank is the Eritrean Investment and Development Bank
. Primarily the bank was established to provide agricultural and commercial loans to investors.
Asmara
Asmara is the capital city and largest settlement in Eritrea, home to a population of around 579,000 people...
and Massawa
Massawa
Massawa, also known as Mitsiwa Massawa, also known as Mitsiwa Massawa, also known as Mitsiwa (Ge'ez ምጽዋዕ , formerly ባጽዕ is a city on the Red Sea coast of Eritrea. An important port for many centuries, it was ruled by a succession of polities, including the Axumite Empire, the Umayyad Caliphate,...
. And by the end of the Italian colonial period in 1941, there were four banks and one credit union operating in Eritrea. These banks were; Banca Di Napoli: Banca d'Italia, Banca Di Roma, Banca Nazionale del Lavoro and a credeit union called Casa di credito. These banks had branches in 6 Eritrean cities: Asmara, Massawa, Keren
Keren, Eritrea
Keren is the second largest city in Eritrea. It is situated about 91 kilometers northwest of Asmara. The town serves as the capital of the Anseba region, and is home to the Bilen ethnic group.-History:...
, Adikeyh, Decamahare and Assab.
However, all the banking services, like other services, were only serving the Italians. It was with the coming of the British in 1941 that banking service extended to the local people. The Barclay Bank established branches in Eritrea shortly after the British established their presence in Eritrea and extended the services to the local people.
Private banking continued in Eritrea during the federation and the Haileselase regime. In 1974, when the Degue came to power, like other private sectors establishments, the banking sector was nationalized. All banking services were put under the Commercial Bank of Ethiopia
Commercial Bank of Ethiopia
The Commercial Bank of Ethiopia is the largest commercial bank in Ethiopia and had about Birr 73.7 billion , in assets at the end of June 2010. At the time, the bank held approximately 63.5% of deposits and about 38% of all bank loans in the country...
, which monopolized the banking service. After independence, the Commercial Bank of Ethiopia Branch in Eritrea was formulated to be the Commercial Bank of Eritrea
Commercial Bank of Eritrea
The Commercial Bank of Eritrea is the only banking institution in Eritrea with full retail commercial banking services. It is a government-owned bank with 17 branches throughout the country...
. The Bank of Eritrea
Bank of Eritrea
The Bank of Eritrea is the central bank of Eritrea. The bank is located in Asmara, the capital. The central bank is interested in encouraging foreign investment and in importing capital goods such as industrial machinery and agricultural equipment...
was also established with a role of Central bank.
Banking Services in Eritrea
Banking is the dominant sector in the financial system of Eritrea. The balance of the financial system is made up by the insurance industry. At present there are three commercial banks in operation in Eritrea - The Commercial Bank, The Housing and Commercial Bank, and the Eritrean Investment and Development Bank. All banks with the exception of the Housing and Commercial Bank are under state ownership, while the Housing and Commercial Banks is owned by the ruling party the PFDJ.At present there are no privately owened banks in Eritrea. Previously The Augaro Bank was in operation but quickly shut down after operations began.
Branches of the Commercial Bank of Eritrea and the Housing and Commerce Bank exist in the larger cities and towns of every Region
Regions of Eritrea
||At the time of Independence in 1993 Eritrea was arranged into ten provinces. These provinces were similar to the nine provinces operating during the colonial period. In 1996, these were consolidated into six regions...
of Eritrea. The Agricultural and Industrial Bank of Eritrea, the Eritrean Investment and Development Bank has also branches in the major cities of the regions,
The central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Eritrea is the Bank of Eritrea
Bank of Eritrea
The Bank of Eritrea is the central bank of Eritrea. The bank is located in Asmara, the capital. The central bank is interested in encouraging foreign investment and in importing capital goods such as industrial machinery and agricultural equipment...
(BoE). The BoE is responsible for regulating the lending and deposit interest rates while keeping a handle on inflation and other macroeconomic indicators. As of yet the BoE has not been able to control inflation, which has led to tremendous rates of inflation, up to 23%.
The Commercial Bank of Eritrea
The Commercial Bank of Eritrea
Commercial Bank of Eritrea
The Commercial Bank of Eritrea is the only banking institution in Eritrea with full retail commercial banking services. It is a government-owned bank with 17 branches throughout the country...
is the dominant bank in the country. It owns nearly 80% of all banking sector assets in the country. It is a state owned bank.
Housing and Commercial Bank of Eritrea
This is the second biggest bank in current operation. The Bank was established in 1994 to provide banking service to residential buildings. Later, in 1996 it extended its services to full commercial services.
The Eritrean Investment and Development Bank
The third bank is the Eritrean Investment and Development Bank
Eritrean Investment and Development Bank
The Eritrean Investment and Development Bank was established on 1996-10-28. The Bank did not effectively begin operations until 1998 from its single office in Asmara. The Bank was fully financed by the Ministry of Finance and thus is a fully state-owned bank...
. Primarily the bank was established to provide agricultural and commercial loans to investors.