Zemen Bank has cut interest rates on commercial loans for borrowers in three sectors that have been hit hard by the Novel Coronavirus (COVID-19) pandemic. The hotel, tourism and manufacturing industries have received a 0.4 to three percentage point interest rate cut. Beginning May 11, 2020, the interest rate reduction will remain active for two months. The Bank has been charging an 8.5pc to 17pc interest rate on loans for the hotel and tourism industry and an 8.5pc to 18pc rate 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 and held a discussion on a mandatory decrement of an interest rate for the hotel, tourism and horticulture industries. The interest rate reduction of the industries covers 42pc of the loan portfolio of the Bank, according to Dereje Zebene, president of the Bank, 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 three industries combined account for four billion Birr.
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