Yinager Dessie (PhD), Governor of the National Bank of Ethiopia (NBE) said Saturday that a directive has been issued to allow farmers and pastoralists to secure loans by presenting movable properties as a guarantee.
Accordingly, livestock’s, land ownership certificates, forests, camel and other movable properties will be used as collaterals.
The directive issued by NBE compels financial institutions to direct the loans to cooperatives, unions and Small and Medium Enterprises (SMEs) in the agricultural sector.
Yinager has officially inaugurated the operations of Ahadu Bank Share Company at Flamingo area, Bole.
He said in his remark that beneficiaries from the provision of loan are very few. For instance, only close to 330 thousand people are benefited from loan provision by commercial banks.
Meanwhile, micro finance institutions and lease companies have 5.6 million and 300 thousand borrowers, respectively.
“Loan beneficiaries are very few from a population of 110 million,” Yinager said, adding, “Ethiopia’s economic growth couldn’t be ensured in such condition.”
Mr. Dessie said that loan provisions should also be granted to SMEs, where significant jobs can be created.
The Governor told Ahadu Bank Officials to encompass rural dwellers who are unbanked into the banking system.
Meanwhile, Eshetu Fantaye, CEO of Ahadu Bank told Origins Business that low- productive farmers in rural areas are their target customers.
Eshetu said: “The Bank will work to open 70% of its branches in rural areas, where low-productive farmers are located.”