cbe

USD
53.0886
54.1504
,
GBP
62.1019
63.3439
,
EUR
55.9076
57.0258
,
CHF
54.1489
55.2319
,
SEK
4.6487
4.7417
,
NOK
4.9112
5.0094
,
DKK
6.8036
6.9397
,
DJF
0.2949
0.3008
,
JPY
0.355
0.3621
,
CAD
35.7798
36.4954
,
SAR
12.7797
13.0353
,
AED
13.0803
13.3419
,
XAF
0.012
0.0122
,
INR
,
KES
,
AUD
32.6996
33.3536
,
SDR
,
ZAR
,
CNY
6.9042
7.0423
,
KWD
165.1794
168.483

awash

USD
53.0886
54.1504
,
EUR
55.9076
57.0258
,
GBP
65.0282
66.3288
,
CAD
39.5357
40.3264
,
AED
14.4534
14.7425
,
CHF
56.7004
57.8344

abyssinia

USD
52.8333
53.89
,
GBP
57.1462
58.2891
,
EUR
52.0831
53.1248
,
AED
13.0173
13.2776
,
NOK
4.525
4.6155
,
SAR
12.7148
12.9691
,
SEK
4.287
4.3727
,
CAD
34.7916
35.4874

abay

USD
53.0886
54.1504
,
EUR
55.9076
57.0258
,
GBP
65.0282
66.3288
,
CHF
56.7004
57.8344
,
AUD
36.1321
36.8547
,
AED
14.4534
14.7425
,
CNY
7.629
7.7816
,
DKK
7.5178
7.6682
,
DJF
0.2949
0.3008
,
INR
0.6485
0.6615
,
JPY
0.3922
0.4
,
KES
0.4
0.4409
,
NOK
5.4267
5.5352
,
SAR
14.1212
3.1433
,
ZAR
3.0817
3.1277
,
SEK
5.1367
5.2394
,
SDR
70.5229
71.9334

zemen

CAD
39.5064
40.2965
,
EUR
55.332
56.4386
,
GBP
64.4691
65.7585
,
SEK
5.0667
5.168
,
USD
53.061
54.1222

buna

nib

berhan

wegagen

USD
53.0774
54.1389
,
GBP
62.1396
63.3824
,
EURO
55.8693
56.9867
,
CAD
35.7404
36.4552
,
AUD
32.7503
33.4053
,
CHF
53.6594
54.7326
,
SEK
4.5906
4.6824
,
NOK
4.8276
4.9242
,
DKK
6.7205
6.8549
,
DJF
0.2947
0.3006
,
INR
0.6494
0.6624
,
KSH
0.433
0.4417
,
JPY
0.3471
0.354
,
SAR
12.7667
13.022
,
AED
13.0617
13.3229
,
ZAR
3.1723
3.2357
,
CNY
6.7196
6.854
,
KWD
164.7021
167.9961

dgb

USD
53.0886
54.1504
,
GBP
65.0282
66.3288
,
EUR
55.9076
57.0258
,
CHF
56.7004
57.8344
,
CAD
39.5357
40.3264
,
AUD
36.1321
36.8547
,
SEK
5.1367
5.2394
,
NOK
5.4267
5.5352
,
DKK
7.5178
7.6682
,
DJF
0.2949
0.3008
,
INR
0.6485
0.6615
,
KSH
0.4323
0.4409
,
JPY
0.3922
0.4
,
SAR
14.1212
14.4036
,
AED
14.4534
14.7425
,
ZAR
3.0817
3.1433
,
CNY
7.629
7.7816
,
KWD
172.9627
176.422

enat

USD
53.0886
54.1504
,
GBP
62.1019
63.3439
,
CHF
0
0
,
SEK
0
0
,
NOK
0
0
,
DKK
0
0
,
KES
0
0
,
JPY
0
0
,
DJF
0
0
,
CAD
0
0
,
AUD
0
0
,
SAR
0
0
,
AED
0
0
,
ZAR
0
0
,
CNY
0
0

addis

GBP
59.4718
60.6612
,
USD
52.1166
53.1589

nbe

KWD
126.8085
129.34467
,
CNH
5.6258
5.738316
,
ZAR
2.6751
2.728602
,
AED
9.9063
10.104426
,
SDR
57.7908
58.946616
,
EUR
48.4016
49.369632
,
CAD
28.7765
29.35203
,
AUD
28.3265
28.89303
,
JPY
0.3389
0.345678
,
SAR
9.7001
9.894102
,
INR
0.5525
0.56355
,
DJF
0.2234
0.227868
,
KES
0.3664
0.373728
,
DKK
5.8896
6.007392
,
NOK
4.2714
4.356828
,
SEK
4.3114
4.397628
,
CHF
41.5822
42.413844
,
GBP
53.539
54.60978

dashen

USD
53.0886
54.1504
,
GBP
62.1019
63.3439
,
CHF
54.1489
55.2319
,
SEK
4.6487
4.7417
,
NOK
4.9112
5.0094
,
DKK
6.8036
6.9397
,
JPY
0.355
0.3621
,
CAD
35.7798
36.4954
,
SAR
12.7797
13.0353
,
AED
13.0803
13.3419
,
EUR
55.9076
57.0258
,
DJF
,
INR
,
KES
,
AUD
,
ZAR
,
CNY

oromia

USD
53.0886
54.1504
,
EUR
55.9076
57.0258
,
GBP
65.0282
66.3288
,
SAR
14.1212
14.4036
,
CHF
56.7004
57.8344
,
AED
14.4534
14.7425

lion

USD
53.0886
54.1504
,
GBP
65.0282
66.3288
,
EUR
55.9076
57.0258

coop

Best Bank Loan Interest Rate in Ethiopia 2022

Do you want to take out a loan in Ethiopia but don’t know which bank has the interest rate suited to your investment decisions? Confused about how to apply for a business, house (mortgage), car, diaspora, or interest-free banking loan? We’ve got you covered! Read below to find the bank that is the best fit for you, and get step-by-step guidance regarding the entire credit application process.

Bank of Abyssinia

8.6

Bank of Abyssinia

Ecommerce Payment Gateway

Virtual Banking

Customer Support

E-Commerce

Simplify Customer Experience

Commercial Bank of Ethiopia (CBE)

8.3

Commercial Bank of Ethiopia (CBE)

Widely used Internet banking

Most bank with several branches and ATMs

Prize Linked Saving

CBE Birr

For business

Dashen Bank

8

Dashen Bank

Amole Wallet

Gold debit card

Green card

Amole Digital Banking

Pay from your mobile

Hibret Bank

7.8

Hibret Bank

Hiber-ET

Hiber Shebamile Card

Hiber Agent Banking

Diaspora Banking

Convenient Banking

Awash Bank

7.6

Awash Bank

Banking and Services for micro finance institutions

School Tution Fee Collection Services

Lucy Women's Saving

Business Banking

Plenty of business banking choices

Although the loan application process may vary slightly from one financial institution to the other (and from one type of loan to another), banks generally share some common steps and required documents (as do different types of loans).

 

 

Bank Loan Interest Rate and Approval

Common Steps to Get a Bank Loan

Once you have found the best bank loan interest rate, follow these steps for a speedy loan application approval.

 

  1. Present Loan Application to the Bank

This must state the date of application, the loan purpose, type, amount, and conditions requested, and the collateral offered. It must be signed/stamped by the applicant/authorized personnel

  1. Fill out the Loan Request Application Form (LRAF)

Make sure to fill in all required details and that it is signed by the applicant and bank staff.

  1. Provide All Necessary Legal and Financial Documents

Ensure that the documents are as free from error as possible to avoid wasting time resubmitting files. Any sign of fraud caught at this step may also automatically result in the rejection of the loan request.

  1. Pay Pre-Approval Processing Fees

This may include fees to maintain the loan account, as well as credit information fee (this is to reimburse the bank’s expense when it gets your credit history from the National Bank of Ethiopia).

Note: Beware of banks that have zero processing fees as they may call for a higher rate of interest, stamp duties, and other legal charges instead.

  1. Have a Consultation with the Bank

This step may or may not be skipped depending on the bank’s discretion. It is a face-to-face conversation with the concerned bank authority to get more detail on the applicant and ensure that he/she can pay the principal and interest amount allocated.

  1. Wait for Approval

The bank will now evaluate all the submitted papers and fees.

  • The time it takes for your loan request to be processed depends on many variables such as the business nature and amount of loan taken out, the type of collateral involved, the term of the loan (short, medium, and long), the value proposition that you may provide the bank, and so on.
  • Also, keep in mind that there may be millions of other people requesting credit, and your chance of a quick loan takeout heavily depends on your place on that long list. It could take you 3 days, 3 months, or even a year to get approval.
  1. Receive Offer Letter

The moment the loan request is authorized, the bank will send an offer letter to the applicant disclosing the following:

  • The loan amount that has been approved.
  • The annual percentage rate/interest rate on the total loan balance.
  • Whether the interest rate is variable (usually with inflation) or fixed.
  • Information about the loan’s length of repayment date/ maturity date.
  • How the debt is to be repaid.
  • Credit terms, policies, and conditions.

Once the applicant receives the letter, he/she must check thoroughly to make sure the terms are as agreed upon before signing the acceptance copy.

  1. Evaluation of Property Papers, Site Estimation, or Business Plan/Stage

This step differs for business and personal loans, but the one thing they may have in common here is the technical check and/or estimation fee the applicants may be asked to pay.

  1. Sign the Agreement and Get the Loan

The applicant will now sign the final agreement for the disbursement of the loan. All original copies of properties put up as collateral will be handed over to the bank. The sale of these collateralized assets will not be possible. Fees to be paid after approval may include some or all of the following:

  • Stamp Duty: Usually 1% of the loan
  • Loan Processing Fee: Usually 0.25% of the loan. This may be paid at the pre-approval stage.
  • Revenue Stamp: ETB 5 (5 Birr). Yes, you read that right.

Common Documents Needed to Get a Bank Loan

As with the steps above, there are many documents required regardless of what type of bank loan and bank loan interest rate you are applying for.

 

  1. Legal Document
  • Proof of Identity: Renewed ID or passport.
  • TIN no./Certificate of borrower and spouse
  1. Marital Status Papers
  • If single, a fresh singleness certificate that is not more than 6 months old.
  • If married, marriage certificate and ID of the spouse.
  • If the marriage certificate is issued abroad, it needs to be authenticated by the concerned government organ in Ethiopia.
  1. Loan Application and Loan Application Request Form (LARF)
  • Date of application
  • Loan purpose, type, amount, and condition
  • Collateral proposed
  1. Power of Attorney (ውክልና)-If any
  • The document proving the power of attorney if necessary
  • If this was issued abroad, it requires authentication by the concerned body here in Ethiopia.
  1. Tax Clearance
  • For the borrower
  • For the spouse of the borrower, if married.

      6. Collateral Documents

  • If the collateral is a building/other fixed assets, provide proof of ownership.
  • If it’s a vehicle.
  1. Libre copy and copy of renewed insurance and endorsement (if the car has a plate number)
  2. Proforma invoice (if the vehicle does not have a license plate)

Business Bank Loans Specifics

Business/Commercial loans are the most widespread type of loans given out in Ethiopia. The paperwork may differ based on the business structure (Proprietorship, Partnership, or Corporation). In the case of a PLC, Share Company (S.C.), or Partnership, some or all of the following may be essential:

  • Article of association, memorandum of association, and minute of shareholders, if any.
  • Business plan
  • Feasibility study for project financing
  • Active loans LAFs with contracts, if any.
  • Latest LAF signed by at least 2/3 of the committee members.
  • Latest business visit report
  • Credit Information in the name of:
  1. Applicant and spouse
  2. General management and major shareholders who make up over 50% of the shares, if PLC or S.C.
  3. Updated credit information from the lending bank’s head office or district by letter to NBE if information retrieved from the Credit Reference Bureau is not the latest
  • Management profile, debt confirmation agreement, OD working form
  • Completed contracts, contracts on hand & payment certificates, and letter of award, if applicable
  • Import and/or export performance
  • Proforma invoice & sales agreement in the case of purchase of fixed assets
  • Ethiopian Revenues and Customs Authority’s (ERCA) confirmation on applicable custom duty liability on duty-free machineries/vehicles.
  • Land Holding Certificate (LHS)
  • Real property valuation for building
  • Engineering opinion for change of LHS number and any other major change on site
  • Ownership booklet for vehicle, machinery, and equipment
  • Renewed Insurance for the above-listed assets

Other Documents

  • Share certificate, bank guarantee, CDT, and list of merchandise
  • Financial Statements:
  1. Unaudited: Commercial credit report (CCR)- provisional, interim, and projected.
  2. Audited (for loan request > 5 million ETB): Audit report confirmation, and assurance that the external auditor is on NBE’s authorized list.
  • Latest credit risk grading
  • Account Statement: applicant’s 1-year account turnover with the loan processing bank and/or other banks.

Personal Bank Loans Specifics

Personal loans include house/mortgage and car loans. The bank needs to appraise the house or car that is to be bought with the loan. Accordingly:

  • Once the property is selected, all the original property documents are submitted to and remain with the bank until repayment of the entire loan balance which usually state:
  1. The seller’s surname.
  2. The seller’s identification and address proof.
  3. The name of the property.
  4. The property’s address.
  5. If the seller is not the primary or actual owner, the chain of written documents.
  6. Land Holding Certificate (LHS) and approval for building purchase request.

The bank then checks the legality and authenticity of the submitted papers. If unsatisfactory, more credentials may be mandatory.

  • To take precautions, the bank usually sends property experts to evaluate the property site/vehicle to be bought or constructed. This is done to verify:
  1. The current stage of construction and work progression.
  2. The construction’s quality.
  3. Property Valuation
  4. The amount of time required to construct the house.
  5. The layout of the house and whether or not the governing authority has approved it.
  6. If the builder possesses the necessary certificates for construction on the land, and so on.

 

If the house is already built:

  • The age of the structure.
  • Internal or external property upkeep.
  • The loan term and whether or not the building meets the applicant’s loan eligibility criteria.
  • The construction’s quality.
  • The existing mortgage on the house.
  • The appraisal of real estate.
  • The building’s approval plans, adherence to government regulations, and so on.

* This technical check and value estimation of the site usually results in an estimation fee.

Other Supporting Documents

  • Borrower’s bank statement
  • Proof of employment/income
  • Marriage certificate of the seller if the fixed asset is purchased from individuals.
  • Bill of Quantity for construction requests
  • Renewed trade license of the seller for a vehicle without a plate number
  • Mandatory deposit of 5% of a vehicle’s purchasing value, and 15% of a building’s price or cost of construction.

Diaspora Bank Loans

Loans for Ethiopians living abroad or with different citizenships follow, for the most part, the same credit acquiring process as any other Ethiopian. The catch is that diasporas are usually expected to repay their debt using foreign exchange. But it is also possible to make payments in ETB (Ethiopian Birr), albeit at higher bank loan interest rates. For more information on how to create a diaspora account in Ethiopia and which banks offer the best bank loan interest rates, check out our post about it here.

Interest-Free Bank Loans

Interest-free loans in Ethiopia, as far as our current intel goes, encompass only business-type loans. Since the beneficiary does not pay back the principal plus the interest, the bank instead becomes a partner to the applicant’s business and shares the profit generated. The only extra thing required here is a proforma or a list of prices at which you are planning to sell your products. This lets the bank know how much profit they can expect to see.

Extra Notes on Ethiopian Bank Loan Interest Rates

  • A typical bank loan interest rate may range from 13- 18%, but this rate may get lowered significantly for those who pay in foreign currencies, mainly USD ($), Pound (£), and Euro (€)
  • Most Ethiopian banks give personal (house, car, and other consumer) loans primarily to diasporas, embassy employees, NGO employees, and generally other company workers or individuals that can generate foreign exchanges for the bank.