Commercial banks are directed to lend 12 billion birr from their reserves held at the National Bank of Ethiopia (NBE) to stakeholders in the Ethiopian coffee industry.
The decision, which was approved by the central bank, is anticipated to alleviate financial constraints experienced by coffee producers, suppliers, and exporters throughout the harvesting process, which necessitates large sums of money to pay daily laborers and collect output from farmers.
Despite the fact that the loan freeze was lifted last month, banks were unable to meet the needs of the coffee sector due to liquidity problems caused by the increase in reserve requirements from 5% to 10% in September 2021.
The Ethiopian Coffee Growers, Producers, and Exporters Association applauded the central bank’s recent move, which will be in place until July 31, 2022. When the deadline expires, however, banks will be compelled to meet the 10% reserve requirement.
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