Zemen Slashes Interest Rate for Hotel , Tourism and Manufacturing Industry

Zemen Bank has cut interest rates on commercial loans for borrowers in the hotel, tourism and manufacturing industry by between 0.5 to three percentage points. To be effective from May 11, 2020, the cut in interest rates will remain active for two months, according to the Bank.

Zemen has been charging between 8.5pc to 17pc interest on loans for hoteliers and tourism sectors and 8.5pc to 18pc for borrowers from the manufacturing industry. It cut the rate based on the borrowers' outstanding loan amount and the terms of the loans.

Two weeks ago, the National Bank of Ethiopia (NBE) called upon all chairpersons of the commercial banks to implement interest rates cuts for the hotel, tourism, manufacturing and horticulture industries.

The hotel industry is among the businesses that are hit hard by the impact of Novel Coronavirus (COVID-19). Hotel room occupancy rates in the capital have plummeted to below two percent, a sharp fall from the 64pc registered in the last fiscal year. Close to 88pc of hotels in the capital have also fully and partially closed their doors due to the declining traffic of customers.

The interest rate reduction for the hotel, tourism & manufacturing industry covers 42pc of the loan portfolio of Zemen Bank, according to Dereje Zebene, president, which previously cut interest rates for borrowers in the horticulture industry. Out of Zemen's total loan portfolio amounting to 9.6 billion Br, the hotel, tourism and manufacturing industry comprises four billion Birr.

Tracking COVID-19

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Source: Coronavirus monitor API

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