NBE announces increase in saving interest rate
Dec 6, 2010
Addis Ababa, December 6, 2010 (Addis Ababa) - The National Bank of Ethiopia (NBE) has announced increase in saving interest rate to five percent from four percent previously with a view to encouraging savers.
NBE Governor, Teklewold Atnafu told Journalists here on Monday that the bank has made effective the change for various savings as of Nov.2, 2010.
He said the bank has also started a new bid bond saving to encourage saving by the wider low income public from any parts of the country. According to him the list price of a bond is 500 Birr.
He said the financial institutions and banks will be accessible in all parts of the country within the next five years and customers can buy bid bonds and save easily.
The governor said bid bond holders can use bonds as a collateral to get loans from banks.
He said the interest rate of the bond will be calculated in consideration to the national inflation rate. The payment rate for the bond from one to five years is 5.5 percent. For more than five years would be 6 percent.
He said bid bond owners can sale the bond to a third party legally.
Anyone embraced by the housing development program and could save 40 percent of the needed amount will get 5.5 percent interest rate,he said and adding, the bank will also loan 60 percent of the construction cost.
However, he said the customers need to save the money within three years time and they would reimburse the loan within 17 years.
Teklewold said the procurement and rent of investment machineries program has also been launched to encourage small and micro enterprises.
A customer who saves 40 percent of the money for procurement of investment machineries within two years can get 60 percent of loan from the bank to cover the balance, he said.
The governor said the procurement of investment machineries and rent program would be implemented to encourage small and micro enterprises.
The procurement of investment machineries and rent program of production machineries would be undertaken by an enterprise established by the Ethiopian Commercial Bank, he said.
He said the program will be executed in collaboration with all financial institutions to address small and micro enterprise problems to get loan and collateral.
The governor said with a view to strengthen and expand the social security service the monthly pension contributions of employees of government and non-governmental institutions would be channeled to buy government bond.
The current pension deduct from a civil servant raised from four percent to six percent while government’s contribution increased to ten from eight percent, he said.
The governor said a fund would be established which would be administered by a board to coordinate the social security of the private sector employees.