Radar | Mar 16,2024
Apr 3 , 2020
Executives at Zemen Bank took the banking industry by surprise, cutting interest on commercial loans for borrowers in the horticulture industry to zero. The new rate applies to loans and advances taken for the period between April 2, and June 30, 2020.
The horticulture industry has been the hardest hit due to the Novel Coronavirus (COVID-19), which impacted export freeze. It incurred 11 million dollars in losses in the last two weeks of March and faces the prospect of laying off up to 150,000 people.
This has affected Zemen Bank more than other commercial banks, since the share of this industry in its loans portfolio is higher from others, according to people close to the industry. Zemen Bank has 7.8 billion Br in outstanding loans, of which 6.5pc was advanced to companies in the horticulture industry.
See All Our Coronavirus Coverage in One Place
In making the new adjustments, Zemen Bank may use the liquidity boost it received from the central bank last week. The administration of Prime Minister Abiy Ahmed has decided to release 15 billion Br in cash for commercial banks from the account the banks have paid for one year and three months to buy the mandatory 27pc bond that would have been paid back between April 2020 to June 2021.
"We believe this will help the industry to recover and resume operations," Dereje Zebene, president of Zemen, said during a press conference held this morning at the Intercontinental Addis Hotel.
Dereje was accompanied by Zelalem Mesele, president of the Ethiopian Horticulture Producer Exporters' Association.
Zemen's move is a huge support for the industry, which is currently operating with only 10pc to 15pc of its capacity, said Zelalem.
"It'll help the companies to continue paying their employees and buy fertilisers and chemicals to resume operations," he told Fortune.
To lessen the burden on the exporters, the Bank has removed 75pc in commission fee exporters pay to extend the import period. It also committed the 25pc commission fees it collected, amounting to 800,000 Br, to the Ministry of Health to be used for an initiative to protect the safety of the professionals in the front line of the fight against the virus.
Please give us your feedback on our COVID-19 coverage
The Bank also increased its one-time ATM cash withdrawal limit to 12,000 Br and entirely removed transaction fees paid on withdrawals.
The Bank has also contributed a five-million-Birr donation for the national fund that is mobilising financial and non-financial aid for the emergency preparedness of Coronavirus.
This story is edited to add a comment from Zelalem Mesele, president of the Ethiopian Horticulture Producer Exporters' Association and data about the bank's loan portfolio.
PUBLISHED ON
Apr 03,2020 [ VOL
21 , NO
1040]
Radar | Mar 16,2024
Fortune News | Apr 30,2022
Commentaries | Jul 10,2021
Radar | Jun 25,2022
Fortune News | Nov 30,2019
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transportin...
Jul 13 , 2024 . By MUNIR SHEMSU
The cracks in Ethiopia's higher education system were laid bare during a synthesis re...
Jul 13 , 2024 . By AKSAH ITALO
Construction authorities have unveiled a price adjustment implementation manual for s...
Jul 13 , 2024
The banking industry is experiencing a transformative period under the oversight of N...
Jul 20 , 2024
In a volatile economic environment, sudden policy reversals leave businesses reeling...
Jul 13 , 2024
Policymakers are walking a tightrope, struggling to generate growth and create millio...
Jul 7 , 2024
The federal budget has crossed a symbolic threshold, approaching the one trillion Bir...
Jun 29 , 2024
In a spirited bid for autonomy, the National Bank of Ethiopia (NBE), under its younge...