The Bank was established in January 1, 1994 under the name “Housing Bank of Eritrea Share Company” with an initial capital of Nakfa 5,000,000 and 13 employees. Its mission was to help alleviate the acute housing shortages of the country by providing mortgage loans to individual customers, as well as financing the fast development of housing complexes in the country.

This mission led the Bank to finance the development of three multimillion large-scale housing projects sponsored by the government. This consists of more than 2100 residential units together with a number of offices, social and commercial centers. The three projects include 1 ) the Sembel Housing Complex, 2) the Mai Temenai Low cost Housing Development and 3) the Massawa Housing Project, which the Bank has partially financed, were completed in 1997, 1998, 2000 respectively.The year 1996 was very important for the Bank. It was in that year that the Bank decided to expand its services by transforming itself from a strictly mortgage bank into a universal full-service giving Bank, which included all areas of commercial banking.