among the services banks deliver to its customers, loan for investment and other purpose is the one.
In Ethiopia the listed below are the major type loans most, even if not all, banks provide for their customers.
- Term Loan
- Motor Vehicle Loan
- Construction Machinery Loan
- Partial Financing
- Syndicate Loan
- Agricultural Term Loans
- Idea Financing
- Overdraft Facility
- Overdraw
- Merchandise Loan Facility
- Import Letter of Credit Facility
- Pre-Shipment Export Credit Facility
- Revolving Export Credit Facility
- Advance on Export Bills Facility
- Letter of Guarantee Facility
- Import Letter of Credit Settlement Loan
General Criteria to get loan from banks in Ethiopia.
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.
