Regulatory Alerts2019-02-25
Added · Updated
Limit on Capital Goods Finance Exposure to a Single Lessee Directives No. CGFB/09/2019 (3rd replacement)
The directives establish regulatory limits on capital goods finance exposure to single lessees for all capital goods finance companies licensed by the National Bank of Ethiopia. Standard companies must ensure aggregate exposure to any single lessee does not exceed 2.5% of total capital, while companies with at least Birr 400,000,000 in paid-up capital may extend up to 15% of total capital to Small and Medium Enterprises and up to 25% to large businesses. Companies must implement risk management policies, conduct annual stress tests, and report results to the National Bank, with existing excess exposures requiring compliance within two years.