Addis Ababa, September 9/2020(ENA) The National Bank of Ethiopia (NBE) has announced today the introduction of directives that enable small farmers to use movable properties as collateral and also benefit from micro-insurance.
Announcing the two directives today, NBE Governor Yinager Dessie said using movable properties as collateral is critically important for the livelihood of farmers in general and the agriculture sector in particular.
The actual execution of the new directives will be a game changer to transform the agriculture sector which employs over 80 percent of the total population, he added.
According to him, though the agriculture sector has been given priority by the government in the past, it has been excluded from financial backing.
“We have now prepared the Collateral Registry and the directives will be implemented this coming Ethiopian New Year,” Yinager stated.
Accordingly, banks will allocate 5 percent for small farmers using movable properties as collateral starting from September, 2020, it was learned.
Livestock, crops, landholding certificates, and forest, among others, are among collateral properties to be taken as financial sources in terms of credit.