General Eligibility Criteria for Loan Application
All customers applying for any type of loan/facility shall fulfil the following general eligibility criteria:
- All persons engaged in lawful and credit worthy business/investment activities, are eligible to borrow business loans.
- All persons who have defined and sustainable source of income, except condominium loans, are eligible to borrow consumer loans.
- The business credit applicant shall present
- renewed trade license for the current fiscal year, commercial registration certificate /for Private Limited Companies/ or investment license and principal registration certificate for new projects.
- tax identification number /TIN/ or tax exemption certificate for all of their income.
- submit tax clearance certificates.
- The applicant and/or any of its major shareholders/subsidiaries shall fully settle any previous loss loan to the Bank, if any.
- The applicant shall never be engaged in tax evasion, or in any breach of exchange control regulations, or in any other illegal/unlawful dealings, if the information is available/circulated record is available.
- The applicant shall not have any record of mal-operation of the checking account in the banking system until the rehabilitation period is expired.
- The applicant shall fulfil at least the required minimum equity contribution.
- The applicant and/or any of its major shareholders/subsidiaries/related parties shall not have any non-performing loans in any bank.
- The applicant and/or his/her/its guarantor(s) shall give a written and signed consent for the access of his/her/its credit information maintained with the Credit Reference System and sharing of same among all other banks.
- The applicant shall present all the documents/information demanded by the Bank.
- The applicant ‘s business shall be
- financially viable,
- legally acceptable,
- technically feasible and
- environmental friendly.
- The applicant ‘s credit risk rating shall be grade 1 or 2 or 3 or 4. However, in exceptional cases, new or additional credit may be considered for other grades. Exceptional in this context shall mean loans and advances to be approved within the discretion of a designated committee, no need to forward to the next higher credit committee for approval.
- In addition to these criteria the customer has to fulfil the specific eligibility criteria for each loan and advance indicated in each credit product line.
| Credit Products of CBE | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| S.N | Product Name | Short Description | Tenure | Interest rate | |||||||||||||||||||||
| 1 | Overdraft facility | An Overdraft is a form of credit facility by which a customer may be allowed to draw beyond the deposits of its current accounts for the sole purpose of the day-to- day operational needs of a viable and ongoing business. | a maximum period of one year and reviewed every year unless the Bank demands it to be reviewed in less than this period. | 14% for non-export | |||||||||||||||||||||
| 14% for non-export | |||||||||||||||||||||||||
| 2 | Merchandise Loan Facility |
A Merchandise Loan is a short-term credit facility
provided by the Bank against which the merchandise or
documentary evidence (Railway Receipt, Warehouse
Receipt and Airway Bills) is held as a pledge or collateral
for the loan. The purpose of a Merchandise Loan Facility is to relieve the customer from cash flow problems arising from money being tied up in merchandise. The Bank extends one-time or revolving merchandise loan facilities |
Merchandise Loan Facility shall
be reviewed every year unless
the Bank demands it to be
reviewed. Each advance shall be settled within ninety days except for Merchandise Loan Facility against export standard coffee, i.e., one hundred eighty days. | 15.5% for non-export merchandize | |||||||||||||||||||||
| 8.5% for export merchandize | |||||||||||||||||||||||||
| 3 | Warehouse Receipt Financing | Warehouse Receipt Financing is a financing mechanism in which the CBE provides loans/advances for members and clients of the ECX by pledging the warehouse receipts issued in their names by the ECX. | Advance against Warehouse Receipt is a type of short-term loan to be granted in the form of merchandise loan to a holder of warehouse receipt upon accepting the receipt as collateral. | 14% | |||||||||||||||||||||
| 4 | Import Letter of Credit Facility |
The import letter of credit facility is a credit product that
the CBE extends to the applicants who are engaged in
import business, or other applicants who import for
various purposes on payment of a certain percentage of
the value of the document while opening a Letter of
Credit.
Depending on the financial strength of the customer, the
letter of credit facility account performance and marketability of the import goods, the
minimum margin
to be paid on Import Letter of Credit facility shall be 30%
of the document value. However, the Bank may consider
below this minimum margin for strategic commodity
imports. If the purpose is to import fertilizer by the Central Government/Regional Governments, the Bank may allow its customers to open letter of credit at zero percent margins. | Import Letter of Credit facility shall be reviewed every year unless the Bank demands it to be reviewed | 17% | |||||||||||||||||||||
| 5 | Pre-shipment Export Credit Facility |
It is a loan extended for purchase of raw materials,
processing and converting them into finished goods,
warehousing, packing and transporting the goods until
the time of shipment. The financing shall be availed
against valid sales/export contract or bona-fide purchase
order from a foreign buyer. The facility can be one-time or revolving and, in revolving pre-shipment credit facility, the sum of advances shall not exceed the limit approved. | Up to one year | 8.5% | |||||||||||||||||||||
| 6 | Pre-shipment Export Credit Facility for Manufacturer- Exporters | Pre-shipment export credit facility for manufacturer- exporters is a facility extended to those manufacturers engaged in the manufacturing of textiles and apparels, leather and leather products, agro-processing etc. exclusively/partly for the export market. The facility is availed to curb the working capital financing shortage in such areas as purchase of raw materials, processing and converting raw materials to finished goods, warehousing, and packaging, transporting goods and others up to the final shipment to the export market. | Up to one year | 8.5% | |||||||||||||||||||||
| 7 | Contract Based Channel Financing | Contract based channel financing is a form of pre- shipment advance to be extended to Industrial Park Enterprises which are engaged in the manufacturing of goods to be supplied to manufacturers in the value chain for final export. The loan shall be granted based on valid sales contract concluded between an enterprise operating in an industrial park and its buyers. | Up to one year | 8.5% | |||||||||||||||||||||
| 8 | Livestock Export Financing | Livestock Export Financing is a type of loan provided to customers engaged in export of livestock, in the form of Pre-shipment export credit facility, for the purpose of purchasing, quarantine and transportation of live animals for export purposes. The facility could be one- time or revolving based on the customer’s demand and volume of the business. | Up to one year | 8.5% | |||||||||||||||||||||
| 9 | Letter of Guaranty Facility |
A letter of guarantee facility issued by a Bank is a written
promise/irrevocable obligation by the Bank to
compensate (pay a sum of money) to the beneficiary
(local or foreign) in the event that the obligor fails to
honor his/her/its obligations in accordance with the
terms and conditions of the
guarantee/agreement/contract.
The CBE may extend a one-time or renewable Letter of Guarantee Facilities: | The facility shall be availed for one year and shall be reviewed every year unless the Bank‘s credit approving team demands it to be reviewed | NA | |||||||||||||||||||||
| 10 | Term Loan |
Term Loan is a loan granted for working capital and/or
project finance to be repaid within a specific period of
time usually with interest.
The loan can be repaid in a lump sum on maturity, or in
periodic installments (i.e. monthly, quarterly, semi-annually, or annually), depending
on the nature of the
business and its cash flow. The Bank extends Short-Term Loan, Medium-Term Loan and Long-Term Loan. | Short-Term Loan up to a maximum of one year. | 14.5% for non-export | |||||||||||||||||||||
| 8.5% for export | |||||||||||||||||||||||||
| Medium-Term Loan Above one year up to five years | 15.5% for non-export | ||||||||||||||||||||||||
| 10% for export | |||||||||||||||||||||||||
| Long-Term Loan Above five years | 16.5% for non-export | ||||||||||||||||||||||||
| 11.5% for export | |||||||||||||||||||||||||
| 11 | Micro-Finance Institution’s Loan |
A Micro-Finance Institutions Loan is a loan availed to
Micro-Finance Institutions in the form of term loans that
are repayable within short–to medium terms. The Bank will extend credit to the Micro-Finance Institutions for alleviating their financial constraints in providing credit to micro-entrepreneurs, thereby enhancing their lending capacities | Short-Term Loan up to a maximum of one year. | 11.5% | |||||||||||||||||||||
| Medium-Term Loan Above one year up to five years | 12% | ||||||||||||||||||||||||
| Long-Term Loan Above five years | 12.5% | ||||||||||||||||||||||||
| 12 | Agricultural Input Loan | It is a short term loan granted for the purpose of purchasing and distribution of fertilizers, improved seeds and other agriculture farm inputs to be distributed mainly to small hold farmers, cooperatives, unions and other delegated legal or natural persons. | Up to one year | 10% | |||||||||||||||||||||
| 13 | Condominium Loan | Condominium refers to apartments (studios, one or more bedrooms of the residential section of a condominium) and commercial building built by the federal/regional government and the transfer of which is facilitated through financing of the CBE. | A maximum of 25 years | 12% | |||||||||||||||||||||
| 14 | Diaspora Mortgage Loan |
It is a term loan granted for diaspora for the purpose of
construction or purchasing of residential house. The loan
availed with three kinds of financial arrangements. Arrangement I: repayment shall be in foreign currency with minimum 30% equity contribution in foreign currency. Arrangement II: repayment shall be in local currency with minimum 30% equity contribution in foreign currency. Arrangement III: repayment shall be in foreign currency with minimum 30% equity contribution in local currency. | A maximum of 20 years for foreign currency repayment A maximum of 15 years for local currency repayment | Arrangement I | |||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 9% | ||||||||||||||||||||||||
| 40%≤x<50% | 8.5% | ||||||||||||||||||||||||
| 50%≤x<70% | 8.25% | ||||||||||||||||||||||||
| ≥70% | 8% | ||||||||||||||||||||||||
| Arrangement II | |||||||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 10% | ||||||||||||||||||||||||
| 40%≤x<50% | 9.5% | ||||||||||||||||||||||||
| 50%≤x<70% | 9% | ||||||||||||||||||||||||
| ≥70% | 8.5% | ||||||||||||||||||||||||
| Arrangement III | |||||||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 10%% | ||||||||||||||||||||||||
| 40%≤x<50% | 10.5% | ||||||||||||||||||||||||
| 50%≤x<70% | 11% | ||||||||||||||||||||||||
| ≥70% | 11.5% | ||||||||||||||||||||||||
| 15 | Diaspora Automobile Loan |
It is a term loan granted for diaspora for the purpose of
purchasing brand new automobile. The loan availed with
two kinds of financial arrangements. Arrangement I: repayment shall be in foreign currency with minimum 30% equity contribution in foreign currency. Arrangement II: repayment shall be in local currency with minimum 30% equity contribution in foreign currency. | A maximum of 10 years | Arrangement I | 10% | ||||||||||||||||||||
| Arrangement II | 11% | ||||||||||||||||||||||||
| 16 | Diaspora Personal Loan | Diaspora personal loan is loan availed for diaspora for the purpose of personal consumption with a maximum limit of birr 1 million. | Maximum 5 years | 11% | |||||||||||||||||||||
| 17 | Business Loan Diaspora and other FCY generating customers | Project term loan: - project term loan for diaspora and
other FCY generating customers availed with three
financial arrangements. Arrangement I: repayment shall be in foreign currency with minimum 30% equity contribution in foreign currency. Arrangement II: repayment shall be in local currency with minimum 30% equity contribution in foreign currency. Arrangement III: repayment shall be in foreign currency with minimum 30% equity contribution in local currency. | Maximum 15 years | Arrangement I | 10% | ||||||||||||||||||||
| Arrangement II | 11% | ||||||||||||||||||||||||
| Arrangement III | 11.5% | ||||||||||||||||||||||||
| Term loan for purchase/renovation commercial/mixed
use building: Term loan for purchase/renovation
commercial/mixed use building loan for diaspora and other FCY generating customers
availed with three
financial arrangements as per their equity contribution
and currency of payment for both equity and repayment. Arrangement I: repayment shall be in foreign currency with minimum 30% equity contribution in foreign currency. Arrangement II: repayment shall be in local currency with minimum 30% equity contribution in foreign currency. Arrangement III: repayment shall be in foreign currency with minimum 30% equity contribution in local currency. | Maximum 15 years | Arrangement I | |||||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 8.5% | ||||||||||||||||||||||||
| 40%≤x<50% | 8% | ||||||||||||||||||||||||
| 50%≤x<60% | 7.5% | ||||||||||||||||||||||||
| 60%≤x<70% | 7.25% | ||||||||||||||||||||||||
| ≥70% | 7% | ||||||||||||||||||||||||
| Arrangement II | |||||||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 8.5% | ||||||||||||||||||||||||
| 40%≤x<50% | 9% | ||||||||||||||||||||||||
| 50%≤x<60% | 9.5% | ||||||||||||||||||||||||
| 60%≤x<70% | 10% | ||||||||||||||||||||||||
| ≥70% | 11.5% | ||||||||||||||||||||||||
| Arrangement III | |||||||||||||||||||||||||
| Equity | Interest | ||||||||||||||||||||||||
| 30%≤x<40% | 11.5% | ||||||||||||||||||||||||
| 40%≤x<50% | 11% | ||||||||||||||||||||||||
| 50%≤x<60% | 10% | ||||||||||||||||||||||||
| 60%≤x<70% | 9.5% | ||||||||||||||||||||||||
| ≥70% | 9% | ||||||||||||||||||||||||
| Working Capital Loan: | Maximum 5 years | 11% | |||||||||||||||||||||||
| Commercial Vehicle Loan: commercial vehicle loan
availed with two kinds of financial arrangements. Arrangement I: repayment shall be in foreign currency with minimum 35% equity contribution in foreign currency. Arrangement III: repayment shall be in local currency with minimum 45% equity contribution in foreign currency. | Maximum 10 years | Arrangement I | 10% | ||||||||||||||||||||||
| Arrangement II | 11% | ||||||||||||||||||||||||
| Credit Service Charge | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Credit Processing fee | |||||||||||||||||||||||||
| 1 | For new request | ||||||||||||||||||||||||
| <= 100 Million | 0.025% of the loan request amount Min Birr 1,000.00 | ||||||||||||||||||||||||
| 100 million up to 500 million | 0.05% of the loan request amount | ||||||||||||||||||||||||
| > 500 million | 0.075% of the loan request amount | ||||||||||||||||||||||||
| Renewal at the existing credit facility limit | 0.02% of the existing credit facility, Min Birr 1,000.00 | ||||||||||||||||||||||||
| Renewal at an increased credit facility limit | For existing as per the “new request tariff” above | ||||||||||||||||||||||||
| 0.04% for the incremental | |||||||||||||||||||||||||
| 2 | Amendments related to collateral | ||||||||||||||||||||||||
| Collateral replacement | Birr 2,500.00 per collateral | ||||||||||||||||||||||||
| Collateral Release | Birr 2,500.00 per collateral | ||||||||||||||||||||||||
| Revaluation of Collateral | As per the collateral valuation fee | ||||||||||||||||||||||||
| Appeal on collateral estimation | Birr 1750/collateral | ||||||||||||||||||||||||
| 3 | Renegotiated Credit Facility | ||||||||||||||||||||||||
| Rescheduling (waiver of repayment, amalgamation, amendment of repayment, extension of loan period) | Birr 5,000.00 per loan account, per request mode | ||||||||||||||||||||||||
| Cancellation/Suspension of fore closure decision | Birr 5,000.00 per case | ||||||||||||||||||||||||
| Suspension plus rescheduling | Birr 10,000 | ||||||||||||||||||||||||
| Loan re-approval estimation | Birr 5,000.00 per case | ||||||||||||||||||||||||
| Commitment fee for unutilized fund after re- approval | Birr 10,000 per month | ||||||||||||||||||||||||
| Appeal | 25% of the loan processing fee | ||||||||||||||||||||||||
| Payment of1 insurance premium | Birr 5,000.00 per policy covered | ||||||||||||||||||||||||
| 4 | Merchandise Loan Management | ||||||||||||||||||||||||
| Each time merchandise is pledged | Birr 5,000.00 | ||||||||||||||||||||||||
| Each time merchandise is released | Birr 2,000.00 | ||||||||||||||||||||||||
| 5 | Collateral estimation fee | ||||||||||||||||||||||||
| For residential 1,000+250/each additional floor | |||||||||||||||||||||||||
| For Commercial Building Birr 1,500+Birr 150 per each additional floor | |||||||||||||||||||||||||
| For factories, stores and warehouses Birr 1,500+Birr 150/floor for each additional floor | |||||||||||||||||||||||||
| Fuel station Birr 1,000 per tank | |||||||||||||||||||||||||
| Coffee Hulling and Washing site Birr 2,000.00 | |||||||||||||||||||||||||
| Vehicles and Machineries Birr 500 per booklet/item | |||||||||||||||||||||||||
| Any farm Birr 2,000/green house and Birr 1,000/block for other building | |||||||||||||||||||||||||