Central Bank Reinstates Collateralised Loans

November 29 , 2021

The National Bank of Ethiopia (NBE) has lifted the freeze on collateralised loans. Regulators communicated their decision to commercial banks today, nearly four months after the freeze came into effect.

The restriction has affected the economy and the demand for credit has increased in the last few months, according to Solomon Desta, vice governor of financial institutions at the central bank.

“We had to choose between two evils,” said Solomon.

According to the Vice Governor, the central bank will be closely watching how loans are utilized.

Banks are supposed to monitor too, says Solomon.

The central bank had previously exempted importers, coffee producers and petroleum companies from the freeze.

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