When you open a bank account, you expect your money to be there whenever you need it.
But with most banks, that’s not what actually happens.

Traditional banks lend out most of the deposits they receive.
Mela does not. We hold 100% of your deposits in reserve so your money stays yours — always available, always liquid, always protected.

This model is especially important for global professionals, students, and diaspora families who rely on stability, access, and trust.

Let’s break down how this works — and why it matters for our community.

The Traditional System: Fractional-Reserve Banking

Most banks operate on what’s called fractional-reserve banking.

What happens when you deposit $1,000 at a traditional bank?

• The bank keeps a small portion (for example, $100)

• They lend out the remaining $900

• Your account still shows $1,000 — even though most of it isn’t actually sitting there

This system works only as long as everyone doesn’t ask for their money at once.

When things go wrong

In moments of financial panic — when people rush to withdraw funds — banks may not have enough cash to cover withdrawals. That’s how bank runs happen.

We’ve seen this many times in history, including recent years.
It’s not because banks are “bad” — it’s simply how the fractional system works.

Mela’s Approach: 100% Reserve Banking

Mela operates differently.

When you deposit $1,000, we keep your full $1,000 in safe, liquid reserves.
We don’t lend it out. We don’t invest your deposits to take risks.
Your money is always there.

If every customer withdrew funds tomorrow — everyone would be paid, in full.

That’s what full-reserve banking means.

Why We Can Do This

We don’t rely on lending to make money.

Our revenue model is built on:

• Interchange (a portion of merchant fees when you use your debit card)

• Optional premium services

• Returns on Mela’s own capital — not customer deposits

This lets us prioritize safety and transparency over risky lending.

Benefits to You

✅ Your money is always there

No liquidity risk. No “come back later.”

✅ No exposure to loan defaults or real-estate crashes

Because we don’t lend your deposits, we avoid those risks entirely.

✅ Smooth access in emergencies

Family need support? Travel? Unexpected expense?
Your funds remain available.

✅ FDIC-insured

Your deposits are also protected up to $250,000 —
double-layer security:

• Layer 1: 100% reserves

• Layer 2: FDIC insurance

Peace of mind, backed both by our model and federal protection.

Why This Matters for Our Ethiopian Community

Many Ethiopians have experienced or witnessed:

• Bank instability

• Currency devaluation

• Government capital controls

• Remittance delays and uncertainty

Diaspora families cannot afford to lose access to essential funds.
Parents support households back home. Freelancers rely on timely USD payouts. Students need predictable financial access.

Trust is not a slogan for us — it’s the foundation.

100% reserve banking = complete liquidity and clear control over your money.

How Mela Holds Your Funds

Your deposits are backed by a conservative, secure mix of assets:

• Cash reserves

• Short-term U.S. Treasury instruments

• Highly liquid, safe money-market equivalents

All designed to ensure funds are available at any moment.

We also undergo regular audits and comply with federal banking oversight.
This is long-term discipline, not temporary claims.

The Simplicity Principle

Traditional banks:

“We lend your money and hope everything works out.”

Mela:

“Your money stays yours. Full stop.”

When your deposits stay whole, your confidence stays whole too.

Bottom Line

Traditional Banks

• Lend out deposits

• Higher interest, higher risk

• Vulnerable to loan cycles & market shocks

Mela

• Holds 100% of deposits

• Lower risk, full liquidity

• FDIC-insured protection layer

• Built for stability, clarity, access

For day-to-day banking, USD earnings, and support to family — stability wins.

Experience Modern Diaspora Banking

Open your Mela account.
Deposit with confidence.
Know your money is always there, always yours, and always protected.

Download Mela — the financial home for Ethiopians everywhere.

Your money. Your future. Always accessible.

Educational Note

This article explains the reserve banking model in plain terms.
While Mela maintains 100% reserve practices, features and regulatory structures may evolve. Always refer to in-app information for current details.