EthioBlog

Ethiopia - Oromia International Bank announces system to guarantee trade credits

By Muluken Yewondwossen

New bank, Oromia International Bank (OIB) of Ethiopia has introduced a new banking service that will prevent the use of false trade credit guarantees to pay for goods and services.
In the past week, the bank introduced the Trade Credit Guarantee (TCG) banking service, which is the first of its kind to be introduced in the country. The service will provide a guarantee to wholesalers and retailers for a fixed fee, according to Belay Gemechu, manager of the business development and planning department of OIB.

Previously local traders, including big businesses, illegally used false guarantees for payments. When payments failed to materialise, sellers then discovered that the guarantees they had been provided with during the transaction were fake. The new system provides a method for those guarantees to be authenticated at the time of the sale.


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Development Bank of Ethiopia revises policy for loan buyouts

By Yohannes Anberbir

The new credit policy of the Development Bank of Ethiopia (DBE) approved in September 2008 has been revised due to aspects that created confusion between the policy and its predecessor.

An article to buyout performing loans from banks and a debt rescheduling article are some of the areas amended and approved, according to a top official of the bank.
Investments in all agricultural products, excluding oilseeds, pulses and gums, all manufactured industry products, excluding hides and skins, agro-processed products and manufactured goods are priority areas allowed to be bought out, according to last year’s lending policy.


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Meaza Ashenafi (Photo courtesy U.S. Embassy Addis Ababa

Ethiopia - A new Bank by Ethiopian Women for Ethiopian Women

By Muluken Yewondwossen

Prominent female Ethiopian professionals and entrepreneurs are to form a pioneering Women’s Bank that will be fully controlled by women.
Last Friday, a founding meeting called by promoters of the new bank held talks about the gender-based bank with hundreds of women in the compound of the Belgian Embassy.
The organising committee is chaired by Meaza Ashenafi, one of the founders and former head of the Ethiopian Women Lawyers Association (EWLA), currently working with the UN.
Another organiser, Nigist Haile, executive director of the Center for African Women’s Economic Empowerment (CAWEE) said: “We discussed the idea several times before it came to fruition.”

The Women’s Bank has a vision to empower women economically by providing easier credit and to educate women about the workings of a banking system dominated by men.
“While the Women’s Bank will aim at profit maximizing, it will deliver finance to women with suitable conditions,” Nigist told the participants.

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Bank of Ethiopia to announce winner of the over 600mln birr HQ design

By Hayal Alemayehu

The Commercial Bank of Ethiopia (CBE) and Ethiopian Airlines are holding talks to resolve a case of an alleged plagiarism of a Term of Reference (ToR) document prepared and distributed to consultants who had contested for the design works of the headquarters of CBE, knowledgeable sources disclosed to The Reporter.

The ToR was prepared by Wihib Kebede & Associates, an architectural firm, to guide the design competition of CBE’s future headquarters. Ethiopian is alleged to have issued the same document calling bids for a design of its future headquarters, too, the sources said.

The bank has appealed to representatives of Ethiopian that it has ownership of the document for which it has paid for and that the latter can not use the document. The two parties were holding talks to settle the “surprising incident” until this newspaper went to press, according to sources.
While it is not clear how the airline was provided with an identical document that will guide the design program and regulations of its future headquarters, the representatives of the airline involved in the project have already issued the document to consultants bidding on the design of the airline’s headquarters, sources indicated.


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Commercial Bank of Ethiopia recalls trucks after loan defaults

By Yohannes Anberbir

A huge loan last year from the Commercial Bank of Ethiopia (CBE) that allowed the Ministry of Works and Urban Development (MoWUD) to import 1,000 heavy duty trucks is giving the bank a headache.

The purpose of the loan was to bolster the small construction companies working for the government on various development projects.

The ministry transferred the trucks to construction companies with a five year term loan arrangement; however, failures to service the debt have led the ministry to commence confiscation of some of the vehicles.

A year ago, the bank lent over half a billion birr in support of the ministry's plan. The loans helped the ministry to import 1,000 trucks from China and transfer them to the construction companies. But the recent defaults led an alarmed CBE to confer with the ministry, which subsequently urged 39 companies to return the trucks.
A down payment of 30 percent and payment of the balance within five years were the criteria set by the ministry when the deal was agreed. In addition the contractors must continue giving service to the contracts at hand at a minimum rate and should prioritise government housing projects.


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