Whereas, Commercial Bank of Ethiopia (CBE) has changed its strategic direction to customer centricity with the aim of making saving and credit products more customer centric based on customer value propositions;
WHEREAS, it has become necessary to improve customer experience by digitizing retail and micro business segment through Micro saving and loan products;
WHEREAS, it is necessary to set eligibility requirements, terms and conditions of saving and credit products and services to the retail and micro business segment in view of risk involved and customer’s demand;
WHEREAS, retail and micro business segments are viable and growing segments to be leveraged by the bank through designed products and services that can satisfy the segment’s demand;
WHEREAS, Commercial bank of Ethiopia intends to diversify its credit portfolio mix in terms of tenure through expanding the short-term financing to be availed to retail and micro business segments;
WHEREAS, it is necessary to attract the underserved segment of the society and enhance financial inclusion with low-cost financial services availed through mobile money platform;
NOW, therefore, this procedure is issued to enable implementation of bank’s DMSL policy.
1.2. Short Title
This procedure may be cited as” Digital Micro Saving And Loan Procedure of the Commercial Bank of Ethiopia.”
1.3. Definition of terms
“Credit policy” means a general framework approved by the board that spells out and guides the bank’s credit/financing strategic directions and credit /financing decisions.
“Credit Scoring” means judging/evaluating the creditworthiness of a customer based on basic characteristics and past performance in credit and other relationships with Bank.
“Digital Micro Credit” means micro loans that are requested, received and repaid all through mobile phones (or any other appropriate tools) via interaction with a computer system.
“Digital MSL Policy” means a policy document that governs the management of digital micro saving and credit services.
“Fixed Account” means a saving account locked for a certain period, a minimum of three months, based on the preference of the customers to fulfil their designated plan.
“Lending officials” means any person involved in MSL business of customer acquisition, Credit Worthiness evaluation, Credit operation, Collection, monitoring and decision-making as well as write off and post write off follow up process.
“Loan Pricing” means setting the interest rate, fees, commission, and others to be charged by the Bank on loans, advances, and guarantees extended to customers.
“Retail and Micro Business Segment” means a category of customers having less investible asset, trading transaction and return from business.
“Micro loan” means a small amount of loan availed to micro businesses and individuals for the purpose of supporting businesses and consumption.
“Micro Saving” means a saving scheme designed for small deposits from micro businesses and low income individ
5. Business Maths
1. Basic Business Mathematics
2. The Time Value of Money
a. Simple Interest
b. Compound Interest
c. Annuities
d. Discounted Cashflow Analysis
6. Statistics
1. Presentation of Data
2. Measures of Central Tendency
3. Measures of Dispersion
4. The Normal Distribution
5. Measures of Correlation and Regression
6. Index Numbers
7. Time Series Analysis
7. Suggested Further Reading Materials
1. Calculus
2. Linear Algebra
3. Probability and Statistics
4. Operational Research
11. What is the main concern of a company?
Profit
Profit = Selling Price - Cost Price
Topic 1 Basic Business Maths
12. 1. Mark-up
An amount added to the cost price and is
expressed as the percentage of the cost price
cost price
cost price
Mark-Up(%)=
Profit
Cost Price
Selling Price-Cost Price
Cost Price
14. 2. Margin
An amount added to the selling price and is
expressed as the percentage of the selling price
selling price
selling price
Margin(%)=
Profit
Selling Price
Selling Price-Cost Price
Selling Price
19. 5. Commission
This is an incentive for a salesman to sell more,
work harder.
Commission=Sales Commission Rate
Commission
Sales=
Commission Rate
20. 1. Commission Only
2. Retainer + Commission
Total Remuneration (Earnings) =
Total Remuneration (Earnings) =
3. Multiple commission
(Sliding Scale of Commission)
S × CR
Types of Earning(3)
R + S × CR
21. You are offered the choice of being paid
commission only at 10% on all sales or a
salary of $1,000 per month plus
commission of 5% on sales. Which would
you choose?
Package 1:
$18,000 × 10% = $1,800
Sales: $18,000 in a month
Package 2:
$1,000 + $18,000 × 5% = $1,900
At what point can the two packages make
the same amount of earnings?
S × 10% = $1,000 + S × 5%
S = $20,000
22. The sales level at which it would make no
difference which package you choose is called the
Indifference Point.
Commission only OR Retainer + Commission
Indifference Point
24. A broad-based consumption tax (10%) on
goods, services, and anything else, including
imports, consumed in Australia. Paid by the final
consumers.
There are exemptions for some items:
most educational courses
health food
fresh food
GST
26. Company Tax = Taxable Profit ×30%
A Company is required to pay Company
Tax at a Rate of 30% of Taxable Profit.
material
Company Tax
27. Calculate the tax based on the level or bracket
of income the taxpayer is in.
PAYG (Pay As You Go)
Taxable Income Tax on this income
$1 - $6,000 Nil
$6,001 - $35,000 15c for each $1 over $6,000
$35,001 - $80,000 $4,350 plus 30c for each $1 over $35,000
$80,001 - $180,000 $17,850 plus 38c for each $1 over $80,000
$180,001 and over $55,850 plus 45c for each $1 over $180,000
