The Government Saving Bond is on Sale

• The Ethiopian Government Saving Bond is officially on sale starting March 12, 2011.
• Ethiopian citizens are entitled  to buy the government bond with 500, 1000,3000,5000,10,000,50,000 and 100,000 denominations

The advantages of buying the government saving bond are:

• The interest rate on the government saving bond with the maturity period of 1-5 years is 5.5% per annum and for more than 6 years maturity period the interest rate per annum is 6%.

• The government saving bond is government guaranteed
• Interest  earned from the government saving bond is tax free
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• The minimum government bond denomination on sale is 500 birr coupon
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• The government saving bond buyer can trade the bond in secondary market and or transfer it to his/her heirs or can pledge it as collateral to obtain a loan
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•  The government saving bond can be transferred to a third party

The Government Saving Bond sales has many advantages for the nation:

• It encourages saving
• It creates financial  resource for the country’s continuous growth  and transformation

All Ethiopians are cordially invited to buy the Government Saving Bond and contribute for the historical Millennium Dam Construction

The Development Bank of Ethiopia redesigned the working capital loan repayment period effective from December 21, 2011.

 The Bank has been financing regular working capital loans for a period of one year for projects financed by the Bank.  Besides, DBE has been financing textile industries a special working capital for one year for the purpose of purchasing cotton in addition to regular working capital loan.

 However due to short loan repayment period of working capital & the nature of investment projects, borrowers have faced challenges to pay back loans as per the contractual agreement.  In addition to short repayment period, the recent phenomenon of decline in the price of cotton in world market resulted in decline in the price of cotton products.  Then this leads the customers to hold huge amount of stocks.  So, the Bank is forced to redesign the working capital loan period.  Accordingly the Board of Management of our Bank on its meeting held on December 21, 2011 has decided that:

1.      Our credit policy article 2.4 sub article 2.4.2 should be amended as follows:- “the bank must ensure that the working capital is repaid within two years from the date of disbursement.”  In the case of existing regular working capital loans, the extension of the period should be only one year starting from the due date for loans that faced challenges in repaying their loan.  However accrued interest should be collected before rescheduling as per the NBE directive.  Besides, extension of existing regular working capital loans will be on request basis.

2.      The special working capital loans for cotton purchase should be extended by one year from the due date as per the loan contract.  Hence the remaining outstanding balance will be prorated for one additional year.  However interest accrued should be first collected before rescheduling as per the NBE directive.

3.      If the borrower has already settled the existing special working capital loan for cotton purchase, the borrower can request for another special working capital for each year for the purpose of cotton purchase.

In all cases, all the procedural issues related with the special cotton finance and regular working capital loan will remain the same as before.