Regulatory Alerts2023-04-25
Added · Updated
External Loan in Kind Directive No. FXD/61/2019
The National Bank of Ethiopia establishes regulations for external loans in kind, defined as the acquisition of capital goods via sale with deferred payments or lease agreements. Eligible borrowers, including exporters and foreign investors, must obtain prior approval and register the loan, with foreign investors subject to a debt-to-equity ratio limit of 60:40. The directive sets all-in-cost ceilings based on maturity periods, ranging from LIBOR or EURIBOR plus 2% for loans up to three years to plus 5% for those exceeding five years. It prohibits government and bank guarantees for private loans in kind and mandates that the directive enter into force on May 31, 2019.
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