Private banks helping their customers to mitigate the effects of COVID 19

To mitigate the damages of the pandemic on industries that have fallen as far and as fast as tourism, hospitality and the horticulture sector banks are taking different measures. This week Enat Bank, Wegagen Bank, Abay Bank and Dashen Bank decided to reschedule annulling or reducing interest rate and reschedule loan for sectors like hospitality, tourism and horticulture for three months and above.
Enat Bank has announced to cut interest rate for these highly affected sectors. Enat also decided to remove penalty on those who do not pay their loan on time because of the pandemic. As stated by the president Wondwossen Teshome so far the bank gave around 100 million birr loan for these sectors. The bank has also made some adjustments for international banking by slashing Letter of Credit service charge. Importers that import goods related to COVID 19 will get a 50 percent discount in the service charge and commission payment.
Abay Bank has also announced to cut interest rate and principal payment for three months. The bank has lifted interest rates from 0.5 percent to 3 percent depending on the sector. “This will cost the bank to lose more than 55 million birr income however to remain in the business we need to support our customers,” said Belete Dagnachew, Vice President of the bank. Abay’s revised rate will remain active until the pandemic is under control.
Wegagen Bank also announced that a 53 percent interest rate cut to hotel, tourism and tour operators and 39 percent cut for the horticulture sectors for three month.
Dashen Bank in its part also cut different kind of service charges and interest rates to those that are affected by Novel Coronavirus (COVID-19). The sectors include transport, manufacturing, hotel, tourism, horticulture and education sectors. As stated by the bank Dashen has cut off up to seven percent interest rate.
Starting from March 13 when the first case was reported in Ethiopia the overall economic activities of the country has been affected. Through then the government has been taking different measures to mitigate the risks. As one of the measures taken by the government the National Bank of Ethiopia has been calling banks to come up with their own initiative to mitigate the effect on their clients mainly for those who are highly affected because of the outbreak of the corona virus.
Based on that, banks have submitted their proposal on how to contribute to the mitigation strategy for their clients.