Bunna International Bank S.C. has been established as a commercial bank and expected to comply with all the directives and guidelines issued by the regulatory authority, i.e. the National Bank of Ethiopia (NBE).
Accordingly, BIB is expected to cater banking products and service only for legitimate commercial and personal activities.
The following credit facilities shall be given priority only for startup period.
§ Regular overdraft facility
§ Temporary overdraft facility
§ Overdrawals on,
§ Regular O/D
ü Current account
ü Trade finance
§ Advance on import bills
§ Advance on export bills
§ Merchandise loan
§ Term loans
ü Short term loan for
Ø Working capital
Ø Constriction bride finance/loan
ü Medium term loans for
Ø Purchase of new truck
Ø Purchase of new construction machinery
Ø Purchase of new factory machinery
Ø Personal /use/ loan
§ Guarantees and letter of credit facilities
ü Bid bond guarantee
ü Advance payment guarantee
ü Performance bond guarantee
ü Custom bond guarantee
ü Retention payment guarantee
ü Letter of credit facilities
These may be residential or commercial buildings owned by the borrower or a third party and currently in use or under construction. However, building under construction should at least be at habitable stage. The bank’s engineer shall estimate the value of buildings presented as collateral and estimation fee shall be borne by the borrower.
§ Motor Vehicles (trucks and trailers, tankers, buses, dump-trucks, automobiles)
New motor vehicles may be accepted as collateral. In this case, the invoice value of the new vehicles shall be considered. Used motor vehicles may be accepted only as additional collateral together with building. However, for new loan the share of used motor vehicles shall be exceed 25% of the collateral value. Moreover, as a matter of policy, the age of used motor vehicles shall not exceed five years.
§ Machinery and equipments
New machinery and equipment may be accepted as collateral. The invoice value of the machinery and equipment shall be considered as acceptable collateral. Used machinery and equipment may be accepted only as additional collateral together with building. However, for new loans, the share of used machinery and equipment shall not exceed 25% of the collateral value. Moreover, the age of used machinery and equipment shall not exceed five years.
§ Trade Receivables
The bank may accept trade receivable (which is backed by a firm undertaking from the debtors) as collateral for loans with a maturity term of three month or less. In such cases, the maturity structure of the receivable shall be less than the maturity term of the loan by at least one month.
§ Cash and Cash Substitutes
Collateral in the form a deposit shall be backed by a letter of assignment on the deposit from the depositor(s)
§ Negotiable Instruments (Treasury Bills and Government Bonds)
§ Share Certificates
§ The margin on share certificates as collateral shall not exceed 70% of the share par value of market value whichever is less.
Guarantees (Bank Guarantee and Personal Guarantee Merchandise)
§ It shall be readily marketable in the local and foreign markets
§ It shall not be perishable, i.e. it must be a commodity that can be strong for a relatively long period without showing physical deterioration.
§ It shall be a commodity for which market price is relatively stable
§ It shall be a commodity whose value can be determined, and Insurable
§ Other points to consider; equipments and furniture shall have insurable cover
Bunna International Bank S.C. will charge competitive interest rate on loans and advances ranging from 8.5 to 14% depending on the type of credit facility, maturity of the facility and associated risk.