Neway Megersa, the founding president who steered Siinqee Bank through its transformation from a regional microfinance institution into one of Ethiopia’s fastest-growing commercial lenders, has been appointed Chief Executive Officer of the Oromia Sovereign Fund. The bank has named Getachew Deressa as its Acting Chief Executive Officer.

From microfinance to commercial banking

Neway’s departure closes a defining chapter for the institution. Siinqee grew out of Oromia Credit & Saving S.C. It began its transition into a commercial bank after the National Bank of Ethiopia (NBE) issued a rule allowing microfinance institutions to become full-fledged banks. The NBE approved Neway as the bank’s first president after he had spent a year as its board chairperson. The bank formally received its license on February 16, 2022, with subscribed capital of 15 billion birr and paid-up capital of 7 billion birr.

Before taking the helm, Neway had about 13 years of banking experience, including five years in planning and research at Nib International Bank and eight years in several positions at Oromia Bank, and from 2018 he was Managing Director of Kegna Beverages. He holds an economics degree from Mekelle University and postgraduate degrees from Addis Ababa University.

Growth under his tenure

At the official launch in September 2022, Neway said the bank aimed to become the country’s leading bank within five years and one of Africa’s largest. The bank has since grown quickly. It has reported more than 50 billion birr in credit extended to about a quarter of a million borrowers, operates close to 600 branches nationwide, and employs more than 11,000 people.

The growth has not come without constraints. While deposits grew rapidly, lending was held back largely by the NBE’s ceiling on credit growth, and the bank responded by becoming active in interbank and open market operations. It has kept close to its microfinance roots, directing about 38 percent of new loans to agriculture.

Neway was also pursuing a larger strategy before his move. He had outlined plans for a Siinqee Group of up to 10 subsidiaries, including the bank, an investment banking firm, an insurer, a lease financing business, and a microfinance institution.

What the move signals

Neway’s appointment to lead the Oromia Sovereign Fund places one of the region’s most prominent bankers at the head of its public investment vehicle. The link to the regional government is a close one: about 70 percent of Siinqee Bank’s shares are held by public companies under the Oromia Regional State. His experience building a regional institution into a national bank is likely to shape expectations for how the fund manages and grows public assets.

At the national level, Ethiopia already has a federal sovereign wealth fund, Ethiopian Investment Holdings, which is led by CEO Brook Taye. A regional fund in Oromia, the country’s most populous region, adds a new player to the investment landscape.

Continuity at Siinqee

Getachew Deressa takes over day-to-day leadership of the bank in an acting capacity. His task will be to maintain momentum on the bank’s expansion and group restructuring while the board decides on a permanent successor, an appointment that will require NBE approval.