Cooperative Bank of Oromia is a private commercial bank in Ethiopia. As of December 2019, the Bank has about 5.9 Million account holders, a branch network of about 409 network. Cooperative Bank of Oromia has ETB 50.21 billion Asset, ETB 2.34 billion Capital and ETB 41.05 billion in Deposits. Its headquarter is located in Addis Ababa, Africa Avenue Flamingo area. The Bank has broad ownership base and diversified ownership structure.
History
The history of co-operative banks has been traced back to the financial exclusion faced by many communities in 19th century. With the industrial revolution, the emerging financial services sector was primarily focused on wealthy individuals and large enterprises in urban areas. The rural population, particularly farmers, small businesses and the communities they supported, were excluded from financial services. Thus, co-operative banks were originally set up to correct this market failure and to overcome the associated problems of asymmetric information in favor of borrowers. Beginning in Germany, the co-operative banking concept gradually spread to the rest of the continent and to the Nordic countries. In respect of Ethiopia, the country has a very low financial service coverage as mainstream financial institutions are heavily tilted towards the urban centers with good physical infrastructure, leaving the rural areas underserved. Traditionally, ‘Equbs’ and ‘Idirs’ are informal institutions that are deeply ingrained in the life communities and have also been serving financial needs of the society. Reluctance and low capacity of the financial institutions in the country to serve rural community, a demand-supply gap prevailed in financial market especially in rural areas, coupled with farmers awareness to be organized in to cooperatives and the increasing need to finance cooperatives’ called for establishment of a cooperative bank. Furthermore, finance appeared to be the critical bottleneck to sustain the cooperative institutions and ultimately the farmers. It was all these glitches that initiated the inception and establishment of Cooperative Bank of Oromia. Obbo Haile Gebre Lube, regarded as the founding father of Ethiopia’s cooperatives, brought the idea of founding the bank for he believed that the best way to fight poverty is through cooperation. Formally establishing a project once in 2002, the bank’s formation was realized with majority of shareholders being the cooperative societies. The bank then is commercially licensed in October 2004 and commenced operations in March 2005. As there is no legal provisions that allow establishment of a cooperative bank in the country, the bank was registered in accordance with article 304 of the commercial code of Ethiopia.
