Banks Use Prizes as Magnet for Forex Mobilisation

The lottery system also attracted more banks such as Wegagen Bank, which recently joined the service on August 15, 2019, and it will remain active until February 2020.
The Bank is offering recipients of remittances the chance to win many gifts including 50 smartphones, five washing machines and an automobile. The value of the gifts that Wegagen is giving out is three million Br.
Unlike the other banks, Wegagen did not set the minimum amount of remittance to be part of the lottery, according to Bahiru Demissie, manager of product development and the branch expansion division at Wegagen.
The lottery system has not only been adopted by the leading commercial banks but also by the youngest banks. One of these institutions is Abay Bank, which began the service in 2017/18.
Abay started the third round of the raffle on December 30, 2019, and it will last for three months. Abay awards prizes like smartphones, laptops, refrigerators and cars to recipients of remittances.
The lottery is becoming an efficient strategy to gain customers’ attention, according to Belete Dagnew, vice president for corporate service at Abay.
“The lottery aims to maximise profit, generate forex and prevent the informal market transactions that do not pass through officially regulated businesses when they are sent and received,” Belete adds.
The cost of the Bank’s promotional activities reached nine million Br, including the cost of the prizes. The Bank works with money transfer agents including Western Union, Money Gram, Xpress Money and Dahabshiil.
In Ethiopia, remittances represent approximately 7.4pc of the country’s GDP. There are three to five million estimated Ethiopian diaspora living abroad, and most of them are in North America and Europe, according to the Ethiopian Embassy in the UK.
Currently, the country receives over four billion dollars in remittances from its citizens every year, which is 1.4 billion dollars more than its earnings from the export of goods during the 2018/19 fiscal year.
While many of the banks have rushed into the lottery system, Dashen stopped the service after witnessing no significant changes in forex remittance.
“While having regular customers, the lottery winner would be a random person who isn’t our client,” said Asefaw Alemu, CEO of the Bank, explaining why Dashen stopped offering prizes through a lottery system.

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