Hey crew, here’s to another week of cutting through the noise and focusing on what actually moves financial minds forward.

No buzzwords, just the stuff affecting wallets, businesses, & the economy:

📷 Lights, Camera & Brochures: Diary Entries From The Investors Expo

🚣 Easy Credit, Hard Lessons: Navigating Debt Traps

Here’s to the 113th edition

Let’s dive in.

Fresh off Ethiopian Securities Exchange (ESX)’s announcement that weekly share trading crossed one billion birr for the first time, we did what any serious financial publication would do: put on our freshly dry-cleaned suits, packed our business cards and went to the Investors Day Expo, hosted by the Ethiopian Capital Market Authority (ECMA) last week.

Expectations were high.

Ethiopia has a stock exchange now. Listed companies. Investment banks. Securities dealers. An investor app. Public awareness campaigns…to a certain extent.

So, we went looking for the future.

The future….had brochures.

To be fair, the expo was useful. For a market this young, getting regulators, ESX, brokers, investment banks, advisors, Fayda registration, and the public in one room is progress.

It was also genuinely good to see young Ethiopians working in the space, explaining products, pitching services, and trying to build something new in a market that is still very much wearing its name tag.

But after speaking to most operators and service providers, one thing became hard to ignore.

Everyone sounded the same.

Open an account. Trade shares. We offer advisory. We prepare prospectuses. We do valuations. Our fee is this. Here’s our flyer.

At some point, it felt like walking through several branches of the same institution.

ProInvest Capital’s booth was by far the busiest.

Why exactly? Probably good positioning. Not in terms of products/services, literally in terms of their booth’s location. To be fair, their representative was energetic, and came armed with an excel chart.

Ignite Capital, however, was one of the more interesting stops.

They had something different to talk about: a crowdfunding platform.

They said it would go live this week. Unfortunately we’ve lived in Ethiopia long enough to understand what “this week” can mean. We admire the optimism.

Nevertheless, if you’re a startup looking for funding, or an investor looking for promising companies, it might be worth keeping an eye on them. Just don’t hold your breath.

Most others seemed very eager to help us open accounts. Less eager, however, to explain why we should choose them.

That is the first issue.

In a young market, access is important. But access alone is not strategy. If every provider says “open an account with us” and the main difference is fees, then investors are not really choosing between insights. They are choosing between counters.

That may work for getting early accounts opened. It will not build trust.

The second issue is even bigger.

There is a regulatory push for large shareholder companies to register their shares with ECMA. Companies with more than 50 shareholders and/or capital above 100 million birr fall within the scope of registration requirements. That means many companies will soon need advisors, valuations, prospectuses, governance cleanup, and formal capital-market compliance.

That’s fine.

But when we asked a simple question, the answers were nowhere.

Suppose we were a company like Fresh Corner, with hundreds of millions of birr in capital. What exactly is in it for us?

Not legally. Commercially.

Why should a company want to enter this market beyond “the directive says so”?

Could we raise expansion capital? Improve governance? Create liquidity for shareholders? Build credibility with lenders? Attract institutional investors? Prepare for regional growth? Turn a sleepy shareholder base into actual market value?

These are some of the answers we expected to hear.

Instead, all we got was compliance: “You have to do it.”

Wonderful.

A real capital market cannot be built only on obligation. It has to be built on opportunity.

Then there is the stuff behind the numbers.

ESX crossing one billion birr in weekly share trading is a real milestone. But reports of manual reconciliation, identity mismatches, unfinished system integration, and multi-week delays are a reminder that markets are not built by bell-ringing alone.

If an investor buys shares and then waits weeks trying to understand where things stand, that is not capital-market participation.

That is suspense.

And suspense belongs in movies, not trade confirmations.

We also had a chat with ESX about Neway, their trading app. We explained, in our usual sarcastic but diplomatic tone, that the app still needs work.

This won’t be news to you, our loyal readers. By “needs work,” we mean: back to the drawing board.

None of the brokerages we spoke to seemed to be remotely interested in building their own serious trading platform. ESX assured us there is room for others to build and provide better trading apps.

Reassured, however, we were not.

Technically, yes, one can build a competing app. Commercially? Good luck.

Neway is a state-backed, integrated platform connected to the market infrastructure, and for which ESX has surely spent many tens of thousands of dollars to the Pakistani developers.

Anyone building a competing app would need licensing, integration, trust, users, broker relationships, support, security, and a business model that earns money before the founders grow grey hair from paperwork.

Possible? Sure. Easy? Absolutely not.

And that sums up where the market is.

The headline is exciting: one billion birr worth of shares traded in a week.

The ground-level experience is more mixed: similar pitches, unclear differentiation, shaky back-office processes, an underwhelming app, and service providers still learning how to sell the value of capital markets rather than just the requirement to comply.

But maybe that is what “early” looks like.

Awkward. Repetitive. Slightly confusing. Full of brochures.

Still, it’s promising.

The institutions are here. The young professionals are here. The first trades are happening. The public is starting to pay attention.

Now the market needs the next layer: better research, better platforms, better explanations, better onboarding, and advisors who can answer the question every investor and company should really asking.

Not just “how do I participate?”

But “why should I?”

The availability of capital is becoming easier.

Historically, securing a loan in Ethiopia required heavy collateral or extensive personal networks.

Today, the rise of digital fintech platforms like Telebirr offer uncollateralized banking options directly available on our phones. Expanding microfinance networks also means that credit is on every street corner.

Yet, the fundamental laws of debt remain unchanged.

Debt is a powerful accelerator, but it is entirely indifferent to whether it is accelerating growth or distress.

For an individual or a business, the primary concern is the interest rate. But we would argue that financial discipline and literacy is way more important before you sign that contract.

We all know, or at least we’ve heard this being said, that borrowing money is a trade-off between your present cash position and your future convenience.

If you take a reasonable loan, you will manage the repayments in the future without too much worry.

If not, the psychological implications can be unbearable. The stress often stems from a misalignment of our pockets: borrowing without calculating how we will service the debt. Sometimes it can be as simple as the repayment schedule not aligning with your seasonal income, as some North Wollo farmers found out.

Define you baseline requirements. Is it growth or consumptive borrowing?

Growth (ሃብት Multiplier): You use credit to acquire an asset or fund an operation that produces an economic return greater than the cost of the loan itself. This is where entrepreneurial spirit coupled with financial literacy comes in handy. If you do your due diligence right, the sky is the limit…ሃብት ካለ በሰማይ መንገድ አለ

Consumptive (ምጥጥ እንደ ስፖንጅ): Sometimes you just need to bridge personal expenses or cover operational overhead that does not yield a direct financial return. This is where you need to accept that you’re making a real trade-off on your future. Have a plan on what sort of costs you can cut (wipe your tears) or extra cash you can earn (wipe your sweat) to service your debt. But this shouldn’t be a recurring theme of your credit story.

Prepare a checklist to protect your wallet and stress level before engaging any lender.

Calculate the True Cost of Capital: Look past the nominal interest rate and incorporate processing/originating fees; mandatory initial deposits or insurance; compounding frequencies; consider late payment penalties.

Test Scenarios: If you are borrowing for a business, model your cash flows under the assumption that this loan does not increase your sales for the first six months. Can your existing operations support the monthly debt service?

Ring-Fence: Ensure that borrowed funds are deposited into an isolated account dedicated exclusively for the purpose of your loan and deposit any incomings to service your debt. Don’t let it fraternize with your daily expenses and nightly escapades.