Banking Solutions
Ordinary Saving Account
Ordinary Saving Account
It is an interest-bearing account which is compounded monthly and calculated on minimum balance of the month. The minimum balance to open this account is Birr 50.00. However, it can be opened and maintained with zero balance for a month, with the intention to establish relationship and to introduce potential customers to banking services. Within a month, the account holder should credit at least a minimum of Birr 25.00 in his/her account. However, if the account is not credited in the specified period, it should be closed following the normal account closing procedure.
Savings account can be opened and/or operated by a legal agent in the name of the principal, against producing a power of attorney, which shall be authenticated from the respective issuing body, or attested by the bank’s legal service process. If branch managers or customer service managers prove the genuineness of the document through proper KYC process, they may open an account and allow operation without authentication and with legal advice. The following are basic features and advantage of having this account.
Additional Features:
- It is an interest-bearing deposit account,
- The minimum balance to open this account is Birr 50.00,
- One can withdraw from his/her account by properly filling a withdrawal slip,
- Can be operated by a passbook and/or an ATM-Card,
- It can be opened and/or operated by a legal agent in the name of principal, against producing a power of attorney,
- No restrictions on the number and amount of deposit and withdrawal unless restricted by pertinent bodies.
Benefits
- It improves saving culture/habits of the society,
- It enables the depositor to earn income through interest,
- It helps the depositor to make fund transfer,
- Enables payment through ATM/POS cards, internet & mobile and etc.,
- It provides immediate cash as and when required.
- It gives record of all transactions for the customer.
Equipment/machinery Lease Financing
Equipment/machinery Lease Financing
The Bank may avail the Equipment/Machinery Lease Financing for either of the parties to the lease agreement i.e. Equipment/Machinery Lease financing for the lessee or Equipment/Machinery Lease Financing for the lessor.
The capital goods include earthmoving machines, construction vehicles, combiner, harvesters, etc. that are considered as essential to conduct business in any sector of the economy.
Consulting Firm Financing
Consulting Firm Financing
Consulting Firm Financing is a form of short-term loan extended for the purpose of working capital financing to business professionals engaged in rendering professional services such as Engineering, ICT, Law, Accountancy, Management, Architecture, Art, etc.
In addition to the General Eligibility Criteria, the customer shall fulfil the following specific requirements.
- Valid professional license from the concerned government body.
- The applicant shall have a minimum of two-year experience.
- Up-to-date financial statements (Audited or Provisional) including forecasted cash flow statement and business plan.
- Such loans shall be backed by acceptable collaterals.
Other Financings
Partial Financing for Acquired and Foreclosed Collateral
Partial Financing is a financing scheme whereby the Bank covers a portion of the auction price of foreclosed and acquired properties presented for sale by the Bank. These properties mean buildings, vehicles, machineries, and business establishments that are either held as collateral or acquired by the Bank.
Equipment/Machineries Lease Financing
The Bank may avail Equipment/Machineries Lease Financing to either of the parties to the lease agreement – lessee or lessor.
The capital goods include earthmoving machines, construction vehicles, combiner, harvesters, etc. that are considered as essential to conduct business in any sector of the economy.
Import Letter of Credit Settlement Loan
Import Letter of Credit Settlement Loan is a form of a loan extended to a borrower by converting the outstanding import letter of credit document’s value either to a merchandise loan facility or to a term loan upon the fulfillment of the required eligibility criteria for a maximum period of one year when a customer is unable to clear the L/C documents due to shortage of cash flow. Such loans are not allowed to a customer for more than two times a year.
In addition to the General Eligibility Criteria, customers shall fulfill the following specific requirements.
- The customer’s credit risk shall be grades 1, 2, or 3.
- Only import letter of credits opened at by the bank shall be financed.
- The applicant should not have any other unsettled long outstanding LC.
- The customer shall apply for the loan within five days after the bank advised the arrival of a letter of credit documents.
Construction Machinery Loan
Construction Machineries Loan
Is a loan extended in the form of term loan for the purchase of new construction machineries – dozers, graders, loaders, excavators, scrapers, rollers, asphalt pavers, crushers, concrete batching plants, concrete pavers, cranes, drilling rigs, wagon drills, chip spreaders, and concrete mixer mounted on trucks. This loan however does not include the cost of spare parts.
The minimum equity contribution for a credit risk grade 1 or 2 applicants is 50% of the purchase price of the machinery to be bought. For credit risk grades 3 and 4 applicants it is 60% and 70%, respectively.
Agricultural Machinery Loan
Agricultural Machinery Loan
Agricultural Machinery Loan is a loan granted to those who are engaged in farming and agricultural related activities on a small/medium/commercial scale or to customers who are engaged in agricultural machinery rental businesses for the acquisition of agro-processing machineries and equipment (such as water pumps, generators, combine harvesters, tractors, coffee processing machines, etc.). This loan may also include the cost of spare parts.
The minimum equity contribution for a credit risk grade 1 or 2 applicants is 50% of the purchase price of the machinery to be bought. For credit risk grades 3 and 4 applicants it is 60% and 70%, respectively.
If the customer offers additional collateral in the form of a building having estimated value equivalent to 50% of the loan amount, the bank may relax the required equity contribution.
Motor Vehicle Loan
Motor Vehicle Loan
A Motor Vehicle Loan is a term loan granted for the purchase of new motor vehicles. The loan does not, however, include the cost of spare parts or luxury items.
In addition to the General Eligibility Criteria, customers shall fulfill the following specific requirements.
- The motor vehicles to be financed should meet the standard specification of the Ministry of Transport – Transport Authority.
- The motor vehicles to be bought shall only be new brand.
- The applicant should provide two proforma invoices from legally licensed supplier, but one proforma invoice for sole agent supplier, which will be verified by sole agent confirmation letter, and/or for suppliers with which the bank has business relationship.
Agricultural Term Loan
Agricultural Input Loan
Fertilizer Loan
It is a short-term agricultural loan granted for the purchase of fertilizers. Applicants that are established as Cooperatives or Associations may be extended clean based fertilizer loans. However, they have to:
- Acquire legal personality from the concerned organ.
- Present minutes of a resolution passed by at least three-fourths of the members of the General Assembly of their Cooperative /Association.
- Provide audited financial statements.
- Employ a Manager and an Accountant/Bookkeeper; and
- Present letter of guarantee from the respective regional or federal government body.
Other Agricultural Input Loans
It is a short-term loan granted to customers engaged in the agricultural sector for the purchase of agricultural inputs other than fertilizers like improved seeds, and/or agrochemicals.
Agricultural Investment Loan
It is a short to long term loan granted for working capital needs as well as purchase or lease of buildings, agro-processing machineries, equipment (such as water pumps, generators, combine harvesters, tractors, vehicles, coffee processing machines, etc.), plant and animal production (dairy, poultry, and livestock fattening activities) in small/medium/large-scale farming, construction of storage facilities, etc.
Priority is given to modern commercial agriculture ventures that produce for export and both rain fed and irrigation system agricultures may be financed. A maximum grace period of five years may be granted for plantations like coffee plantation and a maximum of two years for other agricultural farms.
Term Loan
Term Loan
A Term Loan is a loan granted for working capital and/or project finance to be repaid within a specific period with interest. The loan is repaid in a lump sum on maturity, or in periodic installments (monthly, quarterly, semi-annually or annually), depending on the nature of the business and its cash flow.
For any project financing, the borrower shall first commit her/his/its equity contribution to the project.
The Bank extends Short-Term, Medium-Term, and Long-Term Loans.
- Short-Term Loanis a loan extended to finance the working capital needs and/or to address other short-term financial constraints of the borrower. Short-Term Loan could be granted up to a maximum of two years.
- A Medium-Term Loan is a loan that has a maturity period longer than two years, not exceeding a maximum period of five years, with periodic installments.
- A Long-Term Loan, on the other hand, is a loan, which has a maturity period longer than five years with periodic installments.
The applicant for a Medium or a Long-Term Loan must be able to submit a detailed study of the capital investment project or a business plan. Unless specifically stated otherwise, the applicant must contribute at least 30% of the project cost from own financing. The Bank will finance the remaining balance up to a maximum of 70% of the total project cost after ascertaining the 30% equity contribution.
Letter of Guarantee Facility
Letter of Guarantee Facility
A letter of guarantee is a written promise issued by the bank to compensate (pay a sum of money) to the beneficiary (local or foreign) if the obligator fails to honor her/his/its obligations per the terms and conditions of the guarantee/agreement/contract.
Coopbank may extend a one-time or renewable letter of guarantee facilities. A one-time letter of guarantee facility is a non-renewable letter of guarantee extended to applicants who have no recurrent requests. Renewable letter of guarantee facility on the other hand, is a form of credit facility where the limit is set for customers with recurrent requests reviewed periodically when the customer fulfills the bank’s requirement.
The Bank provides guarantee services to both local and foreign customers. A foreign-currency permit from NBE should be obtained for any form of guarantee that the Bank is requested to issue in favor of foreign beneficiaries.
Types of Letters of Guarantees
- Bid Bond Guarantee,
- Performance Bond Guarantee,
- Advance Payment Guarantee,
- Suppliers’ Credit Guarantee /Trade Credit Guarantee/,
- Retention Payment Guarantee,
- Steamers’ Guarantee /Letters of Indemnity for Missing Documents/,
- Customs Duty Guarantee