Micro-Finance Institutions are organizations that are engaged in providing financial services such as credit and savings to the low-income (actively poor) segments of society.
A Micro-Finance Institution’s Loan is a loan availed to the Micro-Finance Institutions mainly in the form of term loans that are repayable within short – to medium – terms.
The Bank will extend credit to the Micro-Finance Institutions for alleviating their financial constraints in providing credit to micro-entrepreneurs, thereby enhancing their lending capacities.
The Bank may negotiate on interest rate on credit to the Micro Finance Institutions.
Eligibility
Micro-Finance Institutions should have a high quality loan portfolio, saving mobilization, loan-approval system, loan recovery performance and similar performance indices.
Micro-Finance Institutions should also ascertain that they are legally registered with the National Bank of Ethiopia and abide by and meet all relevant policies and directives of the National Bank of Ethiopia regarding:
- Reserve requirement;
- Liquidity requirement;
- Capital adequacy requirement; and
- Minimum paid-up capital requirement and others.
Micro-Finance Institutions that could obtain a credit-guarantee scheme from the concerned organ should come up with at least 75% of the principal loan as security.
|
