National Bank of Ethiopia (NBE) has allowed local and foreign private companies to engage in capital goods leasing business, according to The Reporter.

Explaining what the business is Teklewold Atnafu, Governor of NBE, said “Banks are providing finance while capital good leasing are providing goods”.

Capital leasing is the only financial sector business that is allowed for non Ethiopians to engage in. Commenting on this Teklewold said foreigners need only to fulfill requirements to fully engage in the business. He added the government came to such conclusion after analyzing the move will not have a negative impact on the main financial sector.

NBE’s Directive dictates the minimum requirement to engage in the capital leasing business is 200 Million Birr.

Currently five local companies have shown interest to engage in the business and are waiting for approval of the central Bank, according to The Reporter.

The amended Proclamation, Proclamation No. 103/1998 permitted capital goods leasing in different spheres such as, any equipment or machinery used in production or service rendering companies. According to this Proclamation, Ministry of Trade (MoT) had the power to license all equipment-leasing businesses.

The new Proclamation has three distinct categories; Operating Leasing, Finance Lease and a Hire-Purchase system. Yet the Proclamation has kept the first category under the sphere of MoT.

Source: Reporter