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Lease Financing

Lease Financing – shall mean capital goods financing service availed by the Bank to SMEs under “hire-purchase” modality;

  • The Bank shall not finance used or second-hand capital goods.
  • The total amount of lease financing shall include all costs until commissioning including insurance, transport and installation costs. The associated costs excluding the price of the machinery/equipment shall not exceed 15% of the total cost.
  • The Bank shall not refinance own purchased capital goods.

How to get Started? An applicant who wants to get Lease Financing service should provide their request in hard copy indicating Lease amount, type of capital goods that they want to use.

Eligibility Criteria

  • The Bank shall only accept a lessee/borrower with a total capital from Birr 500,000 to Birr 9 million.

  • The lessee shall submit a business plan and other required documents.
  • The customer shall be of Ethiopian citizen/foreign nationals of Ethiopian origin who has been residing in the country at least for the last one year.
  • The customer shall be able to contribute at least 20% of the total cost of the lease project.
  • The customer shall secure adequate working space which has access to the necessary infrastructure

Mode of Lease Financing

a)The Bank may finance new or graduating projects from micro-enterprises.

b)The Bank may provide additional finance for the purchase of overlooked, missing and/or damaged items during appraisal or procurement process.

Without prejudice to the provision under Article above  of this policy, the Bank may provide capital goods for expansion purpose for:

a)existing customers with successful operational and financial performances in the last two consecutive years;

b)new lease customers applying for expansion with feasible project proposal;

In line with Article above of this policy, the Bank may exceptionally buyout well-functioning leased capital goods in strategic importance sectors financed by other leasing companies at a reasonable discount through negotiation.

1.The lessee may also borrow additional working capital loan from commercial banks or the Bank against collateral.

2. The Bank may extend short-term working capital loan to customers with performing status after two years of operation.

Areas of Lease Financing

Check List for Project Financing

Credit Service

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Project Financing Brochure - Agri Cluster
Idea Financing