Commercial Bank of Ethiopia Launches Mortgages for Diaspora

8 Oct 2018

The Commercial Bank of Ethiopia (CBE) has announced the commencement of mortgage loans for Ethiopian Diaspora (non-resident Ethiopians and foreign nationals of Ethiopian origin).

During a consultative meeting on October 3, 2018, CBE President, Bacha Gina said the launching of the product was part of the bank’s vision to serve and grow together with its customers.
He added that the mortgage loan would benefit non-resident Ethiopians and foreign nationals of Ethiopian origin.

Credit Quality Assurance Director, Emebet Melese explained to the diaspora how the loan could be facilitated.

Business Development Vice President, Yishak Mengesha, on his part, briefed the diaspora about the bank’s background, where it stands now and its vision.

CBE is Ethiopia’s largest commercial bank which, as of June 2015, was estimated to be worth about 303.6 billion Birr in assets and held approximately 67% of deposits and about 53% of all bank loans in the country.

Details on CBE’s mortgage loans for Ethiopians in the diaspora

As part of Prime Minister Abiy Ahmed’s economic reforms, there has been a bold move to allow significant private involvement in a hitherto state-controlled economy.

In late August, Abiy after chairing a Macroeconomic Committee issued a number of forex regulation adjustments for a country that has long suffered a dollar crunch.

  1. The Committee raised the interest rate yield for “27% NBE bill” that requires private banks to purchase National Bank of Ethiopia (NBE) bonds from the current 3% to 5%.
  2. They also removed the current diaspora account limit of USD 50,000. Diaspora account holders can now save unlimited amount in Forex.
  3. NBE’s purchase of 30% of the forex earnings of the private banks will be at mid rate instead of the current buying rate.
  4.  Per their decision, the list of businesses that are eligible to accept payments in foreign currency has also been expanded to include airports, telecom services, chartered private airlines, guest houses, specialized clinics and hospitals serving foreign clients.

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