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Accredited Body: DQS GmbH, August-Schanz-Straße 21, 60433 Frankfurt am Main

CERTIFICATE

This is to certify that

Addis Ababa Chamber ofCommerce and SectoralAssociationsKirkos Sub City, Wereda 4, Chamber BuildingP.O. Box 2458Addis Ababa, Ethiopia

has implemented and maintains a Quality Management System.

Scope:Provision of services and support on: policy analysis and advocacy, membership, businessdevelopment, communication and media (newspaper, radio programs, business forums anddelegations), trade and investment promotion, arbitration, training, and management systems

Through an audit, documented in a report, it was verified that the management systemfulfills the requirements of the following standard:

ISO 9001 : 2008

Certificate registration no.

Valid from

Valid until

Date of certification

497767 QM08

2013-11-15

2016-11-14

2013-11-15

DQS GmbH

Götz BlechschmidtManaging Director

Table of Contents

Introduction 5Business Financing 5Financial Institutions in Ethiopia 6 1. Development Bank of Ethiopia 7 2. Commercial Bank of Ethiopia 11 3. Awash International Bank 13 4. Dashen Bank 15 5. NIB International Bank 16 6. Bank of Abyssinia 18 7. Wegagen Bank 19 8. Zemen Bank 21 9. Cooperative Bank of Oromia 23 10. United Bank 27 11. Oromia International Bank 28 12. Addis International Bank 31 13. Enat Bank 32 14. Abay Bank 33 15. Berhan International Bank 35 16. Buna International Bank 36 17. Lion International Bank 37

Background

The Addis Ababa Chamber of Commerce & Sectoral Associations (AACCSA) has been established, by the General Notice Number 90/ 1947, in April 1947 as an autonomous, non-governmental, non-politi-cal and non-profit organization to act on behalf of its members. The chamber re-establishment with the Proclamation Number 341/2003, further provides the legal framework for the establishment of Chambers of Commerce and Sectoral Associations.

AACCSA is voluntary membership organization with more than 15,000 members in various sectors of business companies. It is mandated to promote and advise trade and investment, disseminating business information, consulting government and members on economic development and business issues, establishing friendly relationship with similar chambers in other countries, and exchanging information as well as engaging in arbitration in times of disputes among members.

It is the oldest, largest and strongest Chamber in Ethiopia, which represents a wide spectrum of businesses constituting for more than 60% of businesses operating in the country. Being a member of the World Chambers Federation, AACCSA also has a prominent place in the international network of chambers.

Vision “To be a world class chamber enabling members to be internation-ally competitive”.

Mission “To promote trade and investment by providing demand driven service to its members and by advocating for favorable business environment based on international best practices”.

Values • Teamwork • Fairness • Credibility • Business orientation • Accountability • Transparency

Business Finance GuideIntrod

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Financial Institutions

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Introduction

Access to business finance play very import role for any business startup and growth. Finance is a good indicator of the health of the company overall, it also holds an important role in managing business growth.

The finance journey is continuous; there may never be an arrival point. Businesses need to make sure there is the finance to back their growth plans. Being able to access the right type of finance at the right time allows businesses to invest, grow and create jobs. A good understanding of the options available is an essential starting point and enables businesses to select the type of finance that is right for their circumstances and plans.

This business guide has prepared by Addis Ababa Chamber of Commerce & Sectoral Association (AACCSA), sets out finance considerations and options for businesses at various stages, providing advice and uses as sources of information to help business start, grow and prosper.

Business Financing

The most common type of finacing business in Ethiopia is bank loan. But recently private equity financing starting to grow to finance business.

Bank Loan: banks are an important source of finance. Banks may lend finance over long periods of time possibly up to 20 years. Bank debt financing is cash borrowed from banks at a fixed rate of interest and with a predetermined maturity date. For business, using bank loans might be relatively easy but the cost of servicing the loan can be high. If interest rates rise then it can add to a business costs and this has to be taken into account in the planning stage before loan is taken out.

Equity Financing: It is exchanging a portion of the ownership of the business for a financial investment in the business. The

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ownership stake resulting from an equity investment allows the investor to share in the company’s profits. Equity involves a periodic or permanent investment in a company and is not repaid by the company at a later date.

Financial Institutions in Ethiopia

In Ethiopia the financial sectors in general and the banking subsector in particular is one of the protected sector. Currently, there are eighteen banks; two public and sixteen private banks.

The sector is regulated and supervised by the National Bank of Ethiopia (NBE), which sets the rules for the operations of the banks and oversees their performance.

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Business Finance GuideProject Finance

Equity Contribution

Lease Finance

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1. Development Bank of Ethiopia

The Development Bank of Ethiopia (DBE) was established in 1909. The bank,with its head office in Addis Ababa,has 95 branch and 12 district offices strategically located throughout the country.The regional offices has the authority to appraise, grant and disburse loans up to a certain earmarked limit.The paid up capital of the bank is 7.5 billion. In general the bank provides two types of financing. Project Finance and Lease Finance.

Project Finance √ It is a medium or long-term loan financed for the establishment of a new project and/or the expansion of an existing business, all of which must be justified by a project feasibility study and/or a business plan. The project loans as a package may embody working capital finance.

Economic Sectors of Project Finance √ Commercial agriculture, √ Agro-processing industries, √ Manufacturing Industries and √ Mining or extractive industries.

Long Term Loan √ Used for the purposes of project construction and capital goods aquization and

√ Maximum length is 20 years including grace period and additional loans or rescheduling.

Medium Term Loan

√ Used for building construction and acquisition of machinery, equipment, furniture and vehicles and

√ A loan repayable time is 3-5 years including grace period.

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Working Capital Loan √ It provides for DBE customers only, √ Financed by commercial banks through a tri-partite agreement entered into DBE, commercial banks and borrowers and √ The Commercial Bank of Ethiopia is used only as a last resort in cases where the customers can not get the loan from any other commercial bank.

Special Line Credit √ It is export credit to be used for raw material purchase and √ The customers are required to secure sales contracts from buyers in the international market.

Input Financing for Pharmaceutical Industries √ The purpose of the loan is for the procurement of pharmaceutical raw materials and √ Tripartite agreements among DBE, customer and the Pharmaceuticals Fund and Supply Agency need to be signed.

Equity Contribution √ New projects

» Domestic investors: 75% : 25% and » Foreign investors: 50% : 50%

√ Expansion projects: » For both investors 60% : 40% and » Domestic investors engaged in export business with backward forward linkage: 70% : 30%

√ Additional loans (for projects under implementation with justified reasons such as cost over run)

» Domestic investors 75% from bank: 25%from investor and » Foreign investors 50% from bank:50% from investor

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Joint Venture √ If 51% or more of the investment owned by domestic company considered as domestic investor,

√ If 51% or more of investement owned by foreign company considered as foreign investor and

√ In-kind contributions accepted by the bank are equipment, machinery, leased land, vehicles and buildings that are used or to be used for the sole purpose of the project to be financed by DBE.

Interest Rate √ First Grade Exporters = 9%; If export sales accounts 80% or more,

√ Second Grade Exporters = 9.5% ; If export sales accounts b/n 60% and 80% or more,

√ Import substitution industries = 9.5%, √ Others = 10% and √ Non-priority industries = 12%

Single Borrower Limit √ Single borrower limit of the bank is Birr 1.875 billion, i.e. 25% of the bank’s paid up capital.

Co-Financing for Mega Projects √ The co-financing can be with National Financial Institutions; i.e. Commercial Bank of Ethiopia (CBE) or International Financial Institutions such as World Bank and African Development Bank (WB, AfDB) and

√ The purpose is to minimize risk, to overcome occasional liquidity problems and to maintain the exposure limit.

Loan Buy Out √ The bank may buy-out loans extended by other local banks and

√ It should be viable/ on-going concerns and priority sector project loans.

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Lease Finance √ It is in kind finance applied for purchase of new machineries based on enterprises needs for new and expansion projects, √ The enterprises should be graduating from micro and small level to middium level, √ They should have six or more employees with total capital of Birr 500,000 to Birr 7.5 million and √ The bank leases machinery which costs a minimum of 1 million and a maximum of 30 million birr.

Economic Sectors of Lease Finance √ Agro-processing industries, √ Manufacturing industries, √ Tour industries, √ Construction industries and √ Mining and quarries.

Equity Contribution √ The loan-equity ratio is 80% from bank -20% from investor, √ The investor can contribute 10% in cash and 10% in kind, √ The bank shall not entertain requests for refinancing of already purchased as well as second hand capital goods/machineries and √ Until the disbursement of last payment the owner of the machinery is the bank.

Interest Rate √ Lease finance interest rate is 9% .

Collateral Requirements √ The financial viability of the project itself, √ First-degree collateral security for all loans, √ Projects operating on rented premises are required to present additional collateral outside the project amounting for 100% of the loan and √ Additional collateral outside the project will not be required, if the premises are rented from government

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organs and written undertakings are obtained from the government organ to enable the bank to transfer the renting right to a third party in case of default.

2. Commercial Bank of Ethiopia

Commercial Bank of Ethiopia (CBE) is established in 1942 to undertake commercial banking activities. It operates with its head office in Addis Ababa and more than 1123 branches stretched across the country. It also opened four branches in South Sudan and has been in the business since June 2009.

Economic Sectors √ Commercial farming, agro-Processing , √ Manufacturing, hotel & tourism , √ Building, construction and transport sectors and √ International trade.

Types of Loan The different types of loans granted by the bank are:

Short Term Loan √ A short term loan is used for working capital needs and/or meet other short-term financial constraints and

√ It granted for a maximum period of 3 years and the repayment can be in lump sum or in periodic installments.

Medium Term Loan √ Is used for acquisition or leasing of fixed business assets, establishment of new projects and expansion of an existing business and

√ It has a maturity period longer than 3 years and not exceeding a maximum period of 7 years.

Long Term Loan √ Helps to finance long term investements and

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√ It has a maturity period longer than 7 years but not exceeding a maximum period of 15 years.

Overdraft √ It is a form of credit facility by which business are allowed to draw cash beyond the deposits of their current accounts for the day to day operational needs of business and √ The facility is availed to customers up to a maximum period of 1 year and it can be renewed every year based on the request of customers.

Merchandise Loan Facility √ It is a short term credit facility extended to customers against merchandise or its documentary evidence and √ The loan facility is extended to customers for a maximum period of 1 year and its maximum advance rate is 80% of the amount of the merchandise.

Pre-Shipment Export Credit Facility √ It is used for purchase of raw material, processing, warehousing, packing, transporting the finished goods to export shipment, √ It required to present receipts of export proceeds at least USD 300,000 or equivalent currencies, or engaged in viable business at least for two years or offer collateral, √ The advance rate ranges from 70% to 90% depending on type of goods to be exported and √ The loan is availed to the maximum of 1 year.

Revolving Export Credit Facility

√ It is an advance paymenet extended to exporters upon presentation of acceptable export documents except bill of loading, √ The maximum advance rate is up to 80% of the value of the export document and √ The facility is availed to the maximum of 1 year.

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Special Truck Loan Financing √ It is a term loan granted to coffee and /or sesame exporters mainly to overcome problems of transportation service prevailed in the export business,

√ Exporters must have at least earned USD 4 million or equivalent of other currencies during the last twelve months and

√ The vehicle has to be a dry cargo truck and trailer with minimum loading capacity of 300 quintals.

Equity Contribution √ New projects required to contribute at least 30% of the total project cost.

Interest Rate √ For export business 7.5% and √ Non export business 9.5%.

Collateral Requirements √ Viability of the project it self for manufacturing and agricultural projects and

√ Acceptable security valued from 75% up to 100% of the total project cost.

3. Awash International Bank

Awash International Bank (AIB) Share Company was established in 1994 with the main objective of serving as a commercial bank. The bank’s head office is located in Addis Ababa and it has more than 223 branches throughout the country.

Economic Sectors √ Commercial agriculture, √ Manufacturing Industry, √ Service, √ Construction, √ Transportation,

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√ Domestic trade, √ Import and export trade and √ Mining resource development.


Short Term Loan √ A short term loan is granted for a maximum period of 1 year,

Medium Term Loan √ This type of loan is a loan repayable within 3-5 years.

Long Term Loan √ The maximum length fixed for long term loan is 10 years with an additional 2 & 1/2 years grace period.

Other Loans The bank extends other loans such as :

√ Overdraft, √ Merchandise loan facility, √ Exporters credit facility which includes, √ Special export overdraft, √ Advance against export Bills, √ Post shipment advance against export bills and √ Letter of credit and letter of guarantee.

Equity Contribution √ All prospective borrowers for investment projects are required to contribute at least 30% of the total project cost.

Interest Rate √ The interest rate of the bank ranges from 8%-16% depending on the economic sector, maturity period and type of collateral.

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Collateral Requirements √ Buildings (residential/commercial), √ Machinery, equipment and vehicles, √ Merchandise goods, √ Agricultural products on site, √ Hotels, hospitals, schools, guesthouses and other related enterprises,

√ Share certificate of financial institutions (banks, insurances) and

√ Guarantees from foreign banks and federal & regional governments.

4. Dashen Bank

Dashen Bank Share Company was established in 1995 to undertake commercial banking activities. Its head office is in Addis Ababa and it has more than 174 branches across the country.

Economic Sectors √ Agriculture, manufacturing, √ International trade (Import & Export), √ Domestic trade and services and √ Construction, transport and real estate.


Short Term Loan √ A short term loan is granted for a maximum period of 1 year.

Medium Term Loan √ A medium term loan has a maturity period of a minimum 2 years and not exceeding a maximum period of 5 years.

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Long Term Loan √ A long-term loan has a maturity period of more than 5 years and not exceeding a maximum period of 10 years.

Other Loans √ Overdrafts, merchandise loans, √ Letter of credit facility, √ Advance on import bills, √ Revolving over draft (for export bills), √ Trade bills discounted, √ Export credit guarantee scheme and √ Letter of guarantee (Advance, Performance and bid bonds).

Equity Contribution √ Equity contribution is minimum 30% and maximum 65% of the total project cost and √ The contribution varies depending on the type of project and economic sector to be financed.

Interest Rate √ The interest rate of the bank depends on the type of the loan, economic sector and term structure.

Collateral Requirements √ The financial viability of the project itself, √ For working capital the collateral ranges from 100%-200% of the project cost based on customer’s risk grade.

5. NIB International Bank

Nib International Bank Share Company was established in 1999 to undertake commercial banking services. It operates through its head office in Addis Ababa and with its 124 branches spread throughout the country.

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Economic Sectors √ Agriculture, manufacturing, import & export, √ Domestic Trade and Service, √ Building and construction, √ Transport,Hotels and tourism and √ Mining, power and water.

Types of Loan The type of loans extended by the NIB bank are :

Short Term Loan √ A short term loan is granted for a maximum period of 1& 1/2 years.

Medium Term Loan √ A medium term loan has a maturity period of 5 years.

Long Term Loan √ Which is used for project financing and has a maturity period of more than 5 years.

Overdraft √ Overdraft facilities are availed for the various sectors financed by the bank and the facility is renewable every six months.

Merchandise Loan √ It is provided by the bank against physical pledge of merchandise good and

√ It is reneweable every six months depending on the nature of business.

Letter of Credit Facility √ The Bank approves letter of credit at appropriate margins depending on the credit worthiness of customers, the nature and marketability of products to be imported and

√ The credit facility can be either for one time or revolving (i.e. for a specified period of time – usually one year).

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Collateral Requirements √ Letter of credit, export documents, warehouse receipt, √ Cash or deposit collateral, √ Bank guarantees, treasury bills and government bonds, federal government guarantee and √ Business mortgage, vehicles, building or house.

6. Bank of Abyssinia

Bank of Abyssinia was established in 1996. It’s head office is in Addis Ababa and has more than 170 branches throughout the country.

Economic Sectors √ Import and export, √ Domestic trade & services, √ Manufacturing/Industry, √ Construction, transport and √ Agriculture.

Types of Loan The different types of loans granted for business by the bank are:

√ Term loans and project finance loans, √ Overdraft loan, merchandise loans, advance against export bill, advance against export Letter of Credit, √ Advance gainst export sales contract, pre-shipment export advance against DBE’s guarantee, √ Import letter of credit facility, import L/C settlement loan √ warehouse receipt loan and partial financing.

Equity Contribution √ All prospective borrowers from the bank are required to contribute minimum 30% of the total project cost.

Collateral Requirements √ The bank accepts movable &/or immovable properties as well as valide documents as collateral.

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7. Wegagen Bank

Wegagen Bank Share Company was established in 1997. The bank with its head office in addis Ababa has more than 134 branches throught the country.

Economic Sectors √ Manufacturing Industry, √ Import & export, √ Construction, hotel & tourism and √ Transport and domestic trade.

Types of Loan The detail loan types granted by the bank are:

Project Financing √ The maximum maturity period is 15 years.

Asset Financing √ The maximum loan life is 5 years.

Working Capital Financing √ It is granted for a maximum period of 1 year.

Overdraft Facility (Overdrawal) √ It required at least one-year customer relationship with the Bank and collateral in the form of building.

Merchandise Loan √ It is granted for fast-moving and non-perishable items & √ Required to present ownership documents & standard store located in towns where bank’s branch exists.

Pre-shipment export credit facility √ Pre-shipment facility against sales contract, √ Pre-shipment facility against Letter of Credit and

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√ At least one-year experience in the export business with proven management capability and excellent financial management.

Advance Against Export Bills √ It required to present satisfactory export documents in compliance with the terms and conditions of the Export Letter of Credit and √ Proven customer track record.

Letter of Credit Settlement √ Granted for applicats not having other long outstanding import letter of credit document.

Import Letter of Credit Facility √ The applicant has to settle at least one non-revolving L/C facility amicably up on advice at any banks and √ The Bank finances only those import letters of credit opened at its end.

Warehouse Receipt Financing √ Applicant should present complete electronic Goods Received Note from Ethiopian Commodity Exchange.

Agricultural Equipment Loan √ Equity contribute should be at least 50% of the cost of agricultural equipment or √ With additional collateral the equity contribution shall be lowered to 30% in proportionate to the value of the collateral.

Project Financing √ The applicant should raise 30% of the project cost but not from debt financing. This can be in the form of construction or capital investment.

Syndicate Financing √ It is group financers pulling their financial resource together in pre-specified proportion for medium or long term investment.

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Equity Contribution √ The equity contribution is 30% of total project cost.

Interest Rate √ For export pre-shipment facilities the minimum interest rate is 8.8% and

√ For loans granted for more than 5 years its maximum interest rate is 17.5%.

Collateral Requirements √ Movable and immovable assets/properties, √ Cash and cash equivalents (government bonds and treasury bills included),

√ Share certificates, √ Bank guarantees (both local and foreign), √ Deposit accounts with Wegagen Bank, √ Cash surrender value of life insurance, √ Personal guarantee and corporate guarantee and √ Valid import/export documents and export credit guarantee.

8. Zemen Bank

Zemen Bank Share Company was established in Addis Ababa in 2008. The Bank’s principal activity is commercial banking. The head office of the Bank is in Addis Ababa, and has two Branches, four corporate units and five Kiosks.

Economic Sectors √ Export, import, building and construction, √ Manufacturing, domestic trade, √ Transport and communication, √ Agriculture, hotel and tourism, √ Financial institutions, √ Mines, power, and water resource.

Loan Types The different types of loans granted by the bank are:

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Short-Term Loan √ The maximum length of short-term loan is 2 years.

Medium Term Loan √ A Medium term loan is a loan which has a maturity period of longer than two years but not exceeding a maximum period of 5 years.

Long Term Loan √ A Long-Term Loan is a loan with a maturity period longer than 5 years.

Project Finance √ The Bank extends loans to customers who have attractive and profitable projects for establishing new projects or acquiring existing ones.

Merchandise Loans √ Merchandise loans shall have tenure of three months for each advance, unless the approving committee extends the maturity date of each advance.

Letter of Guarantee √ The bank extends Letter of Guarantee for those who can provide certificates of performance and payments of past work or supply performance and with proven record in maintaining adequate credit history.

Construction Loans √ These are loans granted to customers who are engaged in construction activities other than real estate development and √ The maximum loan limit is 50% of the total construction cost.

Real Estate Loans √ The Bank extends loans to real estate developers for the construction of new commercial or industrial buildings, renovation and acquisition of real estate property with 10% duration time.

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Loans for Machinery and Equipments √ The Bank may extend loans for acquiring new or used machinery and equipment and

√ 30% to 50% equity contribution required for new and used machinery purchase.

Equity Contribution √ The minimum equity contribution is 30% of the total cost.

9. Cooperative Bank of Oromia

Cooperative Bank of Oromia Share Company is established in 2004 with the objective to engage in commercial banking service. It operates with its head office in Addis Ababa and more than 164 branches stretched across the country.

Economic Sectors √ Agriculture, domestic trade and services, √ International trade (export and import), √ Manufacturing, building and construction.


Short Term Loan √ The maximum length of time the bank advances short term loan is 1 year.

Medium Term Loan √ A medium term loan is a loan which has a maturity period of longer than 1 year but not exceeding a maximum period of 5 years.

Long Term Loan √ A long term loan is a loan with a maturity period longer than 5 years but not exceeding a maximum period of 10 years.

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Overdraft √ Interest is charged on the overdraft facilities on an outstanding balance on a daily basis and √ Overdraft facility shall be backed by immovable fixed collateral-buildings (residential or business premises) or other strong securities, such as cash deposits, bank guarantees and government securities.

Overdrawal

√ Overdrawal may be allowed for a maximum period of two months and may be approved only once in a twelve-month period, √ The overdrawal amount should not exceed 25% of the existing overdraft facility limit or Birr 2.5 million whichever is lower and √ An overdrawal shall be availed with or without collateral depending upon amount of the request and the adequacy of the already offered collateral for the existing credit facility.

Merchandise Loan √ The bank provides such loan against submission of the merchandise or documentary evidence up to a maximum 70% of advance rate and √ Each advance shall be settled within 90 days except for the merchandise loan facility against export standard coffee that is 180 days.

Import Letter of Credit Facility

√ Depending on the marketability of the import goods for a period of 1 year bank availe credit worth 20% against valid import documents and √ The Bank may extend irrevocable one-time and/or revolving Import letter of credit facilities.

Pre-Shipment Export Credit Facility √ The Bank may avail the facility with or without DBE guarantee and

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√ If the facility is availed against the DBE guarantee, the eligibility, amount, tenure and other criteria of the pre-shipment export loan shall be set as per the pertinent NBE directive.

Revolving Export Credit Facility √ The amount of revolving export credit facility loan to be advanced to the customer up to a maximum of 90% depending on the financial strength and track record of the customer.

Letter of Guarantee Facility √ The bank may extend a one-time or renewable letter of guarantee facilities.

Import Letter of Credit Settlement Loan √ It is granted to existing high value customers of the bank having credit risk grade 1 or 2 who encounter temporary cash flow problem to settle the net- margin held on the import L/C document value,

√ The bank shall finance only import letter of credits opened at its end and

√ The bank grants the loan with or without collateral depending on the nature of the goods imported and the credit risk grade of the customer.

Agricultural Term Loan √ The bank extends agricultural input and agricultural machinery investment loan.

Construction Machinery Loan √ It is a term loan for the purchase of new construction machinery and

√ The minimum equity contribution for grade 1 or 2 applicants is 50% of the value of the machinery to be bought, whereas for a grade 3 applicant,it is 60%.

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Partial Financing √ Partial Financing is a financing scheme whereby the bank covers a portion of the auction price of foreclosed and acquired properties presented for sale by the bank, √ The repayment period for buildings/business establishments, machinery and vehicles acquisition are eight, four and three years respectively and √ The applicant should be able to pay 50% minimum down payment in cash immediately and offer the property purchased as collateral.

Syndicate Loan √ The purpose of syndicate loans is to finance medium or long-term investment ventures that demand a large amount of funding together with other financers, diversify risk and reduce liquidity problems.

Micro-Finance Institution’s Loan √ A loan availed to the micro finance institutions mainly in the form of term loans that are repayable within short to medium terms.

Consulting Firm Financing √ Consulting firm financing is a form of term loan extended for the purpose of working capital financing to business professionals engaged in rendering professional services such as Engineering, ICT, Law, Accounting, Management, Architecture, Art, etc and √ The applicant shall have a minimum of 2 year experiences.

Idea Financing √ Idea Financing is a term loan that is extended to individuals/groups for the purpose of implementing scientific studies, which has got recognition in invention and innovation by the concerned government organ, √ The Bank may extend the loan for a maximum period of 7 years with one year grace period, if deemed

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necessary and √ The bank may not require equity contributions.

Equity contribution √ The debt-equity ratio of- truck loan is 50%- 50% and construction loan is a maximum of 30%-70% i.e. at least 70% contribution is required from the customer.

Interest Rate √ Short term loan is 1 year, interest rate is 12%, √ Medium term loan, from 1-3 years, interest rate 13% and √ More than 3-5 years, interest rate 14% and long term loan from 5 years to 10 years, interest rate is 15%.

Collateral Requirements √ Premises, and buildings/houses, √ Motor vehicles (vehicles whose date of manufacture exceeds 10 years may not be considered as collateral).

10. United Bank

United Bank was incorporated as a Share Company in 1998 with the purpose of providing commercial banking services. It operates with its head office in Addis Ababa and more than 128 branches stretched across the country.

Economic Sectors √ Agriculture, domestic trade and services, √ Manufacturing and industry, √ Export, import and √ Building and construction and transport.

Types of Loan The various types of loans granted by the bank are:

Short Term Loan √ The maximum length of time the bank advances short term loan is 1 year.

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Medium Term Loan √ A medium term Loan is a loan repayable within 2 to 5 years excluding any grace period.

Long Term Loan √ The bank advances long term loan for a maximum period of 10 years excluding any grace period and √ The bank also extends credit for overdrafts, merchandise loans, advance on export bills, pre- shipment, letter of credit and letter of guarantee.

Equity Contribution √ A minimum equity contribution is 30% of the total project cost.

Interest Rate √ The bank interest rate ranges from 7.9% to 16.5% depending on the economic sector financed and maturity period.

Collateral Requirements √ Premises and buildings, √ vehicles and construction machinery, √ cash, merchandise, local and √ foreign bank garantees, share certificate and √ business mortgages.

11. Oromia International Bank

Oromia International Bank S.C. was established in 2008 with the objective to engage in banking service. It operates with its head office in Addis Ababa. The bank has 178 branches stretched across the country.

Economic Sectors √ Agriculture, industries, domestic trade, √ International trade (export & import),

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√ transport & communication, hotel & tourism, √ housing and construction, √ mines, powers, water resources and √ financial institutions.

Types of Loan The bank extends the following types of loans:

Short Term Loan √ The bank advances short term loan with a maturity period of not exceeding 2 years, from the date of disbursement.

Medium Term Loan √ A medium term loan has a maturity period of more than 2 years but not exceeding a maximum period of 5 years.

Long Term Loan √ The bank advances long term loan for a period of longer than 5 years, but not exceeding a maximum period of 10 years.

Overdraft Credit Facility √ The bank grants such credit facility for a maximum period of 12 months and

√ Renewable based on satisfactory utilization and business prospect of the borrower.

Merchandise Loan √ The bank avails one time merchandise loan and renewable merchandise credit facility with maturity period 9 months.

Letter of Credit Facility √ The bank extends one time and revolving letter of credit facility and

√ The minimum facility margin shall not be less 20% of the document face-value.

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Advance on Import Bills √ The facility is given for a maximum period of 60 days and √ The customer shall shall has the lowest credit risk rating.

Import Letter of Credit Settlement Loan √ The facility is given for a maximum period of six months.

Pre-shipment Export Credit Facility √ Pre-shipment export credit avails against export contracts; not exceed 70 % of the valid sales contract. √ Pre-shipment export credit against export letter of credit shall not be more than 90% of the L/C face value and √ Revolving export credit facility; maximum margin for the facility shall be 90% of the face value of the document.

Advance on Export Bills √ Export bills can be advanced for a period of sixty days and √ The maximum facility margin shall be 100 % of the document value.

Letter of Guarantee √ The bank may extend it in the form of one time or renewable letter of guarantee facilities.

Equity contribution √ All prospective borrowers from the bank are required to provide a minimum equity contribution of 40% of the total project cost.

Interest Rate √ The interest rate of the bank ranges from 8% to 16.5% depending on the economic sector financed and maturity period.

Collateral Requirements √ Premises, buildings and houses, √ Vehicles and construction machinery,

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√ Merchandise, business mortgage, √ Bank garantees, negotiable instruments, √ Export credit guarantee scheme Issued by the Development Bank of Ethiopia, corporate guarantee, personal guarantee& valid import/export documents.

12. Addis International Bank

Addis International Bank S.C. was established in 2011 with the objective to engage in banking service. It operates with its head office in Addis Ababa with its 32 branches across the country.

Economic Sectors √ Agricultural production, manufacturing, transport, √ International trade (export & import) and √ Buildiing and construction.

Types of Loan The bank extends the following loan types: Short Term Loan

√ The bank advances short term loan with a maturity period of not exceeding 1 year.

Medium Term Loan √ A medium term loan is a loan with a maturity period of morethan 1 year but not exceeding a maximum period of 5 years.

Long Term Loan √ The bank advances long term loan for a period of longer than 5 years, but not exceeding a maximum period of 10 years and

√ The bank also extends credit for overdraft credit facility, merchandise loans, pre- shipment, advance on import and export bills, merchandize term loans.

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Equity Contribution √ All prospective borrowers from the bank are required to provide a minimum equity contribution of 30% of the total cost.

Interest Rate √ The lending rate of the bank ranges from 8% to 16.75% depending on the type of loan, maturity period of the loan and the strength of collateral.

Collateral Requirements √ Premises, buildings, trucks, machineries, √ Construction equipment, merchandize, √ Foreign bank guarantee, local bank guarantee, √ Export guarantee, export commodity stock and √ Export L/C for coffee, cash and shares.

13. Enat Bank

Enat Bank S.C. was established in 2011 to undertake commercial banking activities. It operates with its head office in Addis Ababa. The bank has 14 branches across the country.

Economic Sectors √ Agriculture, industry, construction, √ Domestic trade and service and √ Transportation, Export, Import, hotel & tourism.

Types of Loan The bank extends the following loan types:

Short Term LoanThe bank advances short-term loan for a period of 1 year.

Medium Term Loan √ The bank extends medium term loan for a period of 5 years.

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Long Term Loan √ The bank advances long term loan for a period of up to 10 years and

√ The bank also extends credit for overdraft credit facility, excess drawing, pre-shipment export credit facility and merchandise loans.

Equity Contribution √ For project financing the minimum equity contribution is 30% of the project cost and

√ The minimum equity contribution of Enat Women business financing schem is 5%.

Interest Rate √ The interest rate of the bank ranges from 8.5 % to 16.25%.

Collateral Requirements √ Premises, buildings and houses, motor vehicles, √ Merchandise, construction machinery, √ Agricultural machinery, factory machinery, √ Foreign bank guarantee, deposits in the bank’s branch, √ Negotiable instruments, export credit guarantee and √ Personal guarantee, corporate guarantee and valide import/export documents.

14. Abay Bank

Abay Bank S.C. was established in 2010 to undertake commercial banking activities. It operates with its head office in Addis Ababa and more than 106 branches stretched across the country. Economic Sectors

√ Manufacturing, domestic trade and service, √ International trade (export & import), √ Transportation and communication, hotel & tourism, √ Housing & construction, mines, power and water re-source.

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Types of Loan The bank extends the following types of loans:

Short Term Loan √ The bank advances short-term loan for a period of 1 year.

Medium Term Loan √ A loan with a maturity period of more than 1 year but not exceeding a maximum period of 5 years.

Long Term Loan √ The bank advances long term loan for a period of longer than 5 years, but not exceeding a maximum period of 15 years.

Overdraft Facility √ It is financed for a limited duration normally for six months and in exceptional cases for one year and √ Pre-shipment export credit facility and merchandise loans.

Equity Contribution √ The equity contribution is at least 30% of the total project cost.

Interest Rate √ The bank interest rate ranges from 10.5% to 16%.

Collateral Requirements √ Cash, buildings and leased land, √ Trucks, machinery and equipment, √ Bank guarantees (foreign bank guarantee & local bank guarantee), √ Merchandise, warehouse receipt, √ Share certificate - shares of banks and insurance companies, √ Corporate or personal guarantee and √ Business entity and other collaterals.

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15. Berhan International Bank

Berhan international bank S.C was established in 2008 with the objective to engage in banking service. It operates with its head office in Addis Ababa and more than 92 branches stretched across the country.

Economic Sectors √ Agriculture, export, import, √ Manufacturing, domestic trade and service and √ Construction, transport, and hotel & tourism.

Types of Loan The bank extends the following loan types:

Short Term Loan √ The bank advances short-term loan for a maximum period of 3 years.

Medium and Long Term Loan √ These loans may be longer than 3 years, but not exceeding a maximum period of 15 years.

Other types of Loan √ Merchandise loans,pre-shipment export loan and overdraft credit facility.

Equity Contribution √ For new project 40% equity contribution, √ For acquisition of new assets (machineries, buildings, motor vehicles) 40%-50%.

Interest Rate √ The bank sets its interest rate ranges from 8.5% to 16.75%.

Collateral Requirements √ Stock (merchandize), DBE’S guarantee,

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√ Buildings, vehicles, machinery (only high duty- easly immovable), √ Foreign bank guarantees, financial assets and √ Share certificates and other acceptable financial instruments.

16. Buna International Bank

Buna international bank S.C was established in 2009 with the objective to engage in commercial banking service. It operates with its head office in Addis Ababa and more than 92 branches stretched across the country as at March 23, 2016.

Economic Sectors √ Agriculture, domestic trade and service, √ Building, housing & construction, √ Manufacturing & industry, international trade (export, import), √ Transport & communication, health, hotel& tourism and √ Mines, power, water resources, financial institutions.

Types of Loan √ The bank extends credit for term loans, merchandise loans, pre-shipment, overdraft credit facilities, revolving credit facilities and various types of guarantees.

Interest Rate √ The Bank interest rate ranging from 8.5% to 14% depending on the type of credit facility, maturity of the facility and associated risk.

Collateral Requirements √ Buildings,vehicles, construction machineries, √ Manufacturing machineries, share certificates, √ Personal garantees as additional, merchandise other than perishables and √ Import and export documents.

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17. Lion International Bank

Lion international bank S.C was established in 2006 with the objective to engage in commercial banking service. It operates with its head office in Addis Ababa and more than 110branches stretched across the country.

Economic Sectors √ Agriculture, manufacturing , √ Domestic trade and service, √ Import and Export, building, housing & construction, √ Transport, hotel& tourism, construction machinery and dump truck

Types of Loan The bank extends credit for

√ Term loans, merchandise loans, √ Pre-shipment export credit facility, √ Overdraft credit facilities, overdrawal, √ Revolving credit facilities, import letter of credit facility, √ Letter of guarantee facility, √ Agricultural and construction machinery loan and √ Partial financing, syndicate loan.

Equity contribution

√ The applicant is required to contribute at least 30% of the total project cost.

Interest Rate √ The interest rate ranges from 9.5% to 16%. √ The minimum interst rate of 9.5% set for export term loans.

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Collateral Requirements √ Building and housing, √ Motor vehicle, √ Merchandise, √ Construction machinery, √ Agricultural machinery, √ Forign bank guarantee, √ Cash deposits and √ Negotionable instruments.

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List of Banks in Ethiopia with their addresses

No Name of BanksAddress

Tel Web Site

1 Development Bank of Ethiopia +251 115 511188 www.dbe.com.et

2 Commercial Bank of Ethiopia +251 115 538322 www.combanketh.com

3 Awash International Bank +251 115 570141 www.awashbank.com

4 Dashen Bank +251 114 661380 www.dashenbanksc.com

5 Bank of Abyssinia +251 115 156523 www.bankofabyssinia.et

6 Cooperative Bank of Oromia +251 115 159217 www.coopbankoromia.com.et

7 Wegagen Bank +251 115 523800 www.wegagenbank.com

8 United Bank +251 114 700377 www.hibretbank.com

9 Lion International Bank +251 116 626000 www.anbesabank.com

10 Nib International Bank +251 115 151958 www.nibbanksc.com

11 Zemen Bank +251 115 539042 www.zemenbank.com

12 Oromia International Bank +251 115 572113 www.orointbank.com

13 Bunna International Bank +251 111 554783 www.bunnabanksc.com

14 Berhan International Bank +251 116 185732 www.berhanbanksc.com

15 Abay Bank S.C +251 115 158782 www.abaybank.com.et

16 Addis International Bank S.C +251 115 540530 www.addisbanksc.com

17 Debub Global Bank S.C +251 115581258 www.debubglobalbank.com

18 Enat Bank S.C +251 115158278 www.enatbanksc.com

Source: National Bank of Ethiopia and public and private Commercial Banks.

Note: The material in this publication is provided for general information purpose only. Financing business requirements are subject to change anytime. Readers shall advise to consult their respective banks before making any decision.

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