CBE Announces New Loan Interest Rates Up to 18% for Import Bills and 16.5% for Commercial Loans

In a move aimed at adapting to the changing economic landscape and maintaining competitiveness, the Commercial Bank of Ethiopia (CBE) has announced revised interest rates across various loan categories, effective March 7, 2025. These adjustments reflect the bank’s ongoing transformation efforts and its commitment to balancing operational sustainability with customer needs.

For agricultural loans, CBE has opted for a moderate increase in interest rates. Short-term agricultural loans, including overdrafts, will remain at 14%, while medium-term loans are set at 14.5%. Long-term agricultural loans, which encompass fertilizer financing, will see an increase to 15.5%. These adjustments are designed to support the sector while managing the bank’s rising operational costs.

In the housing sector, the bank has kept rates unchanged for residential condominium loans. Both the 40/60, 20/80, and 10/90 long-term schemes will continue to carry an interest rate of 12%. This decision aims to ensure that homebuyers continue to have access to affordable financing, particularly in a market where housing costs remain a significant concern for many Ethiopians.

The bank’s commercial loan portfolio also sees considerable changes. For non-export term loans, including short-term overdrafts, the interest rates will range from 14% to 16.5%, with short-term loans set at 15%, medium-term loans at 15.75%, and long-term loans at 16.5%. Commercial condominium loans, both for the 40/60 and 20/80 schemes, will now carry an interest rate of 16.5%, up from the previous 15.5%. This increase reflects the need to address the higher costs associated with commercial lending.

Import-related financing has also been adjusted, with short-term advance loans for import bills rising to 18%, up from 17%. Similarly, merchandise loans will now be set at 16.5% for short-term borrowing, an increase from the previous 15.5%. These increases are a response to the growing costs associated with international trade and the need to ensure financial viability in an evolving market.

Microfinance institutions, which play a key role in supporting small businesses, will experience significant rate hikes. Short-term loans will rise to 14%, up from 11.5%, while medium-term loans will increase to 14.5%. Long-term loans for microfinance institutions will see an increase to 15.5%, up from 12.5%. These changes reflect the bank’s strategy to manage the financial risks of lending to small-scale operations while ensuring continued profitability.

In the personal loan category, the bank has introduced the following updates: mortgage loans will now carry a 14% interest rate for long-term borrowers, vehicle loans will be set at 15%, and personal loans will also see a 15% interest rate for long-term borrowers. These adjustments aim to provide retail customers with access to financing options while aligning with the bank’s broader financial strategy.

By recalibrating its interest rates, CBE aims to continue offering essential financial services to individuals, businesses, and key economic sectors while managing its own operational costs and ensuring long-term sustainability.