Whereas, Commercial Bank of Ethiopia (CBE) has changed its strategic direction to customer centricity with the aim of making savings and credit products more customer centric and offering better customer value propositions; Whereas, it has become necessary to improve customer experience by digitizing micro business segment through Micro loan products; Whereas, it is necessary to set eligibility requirements, terms and conditions of loan products and services to the micro business segment in view of risk involved and customer’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 micro business segments; Whereas, it is necessary to attract the underserved part of the society and enhance financial inclusion with low-cost financial services availed through mobile money platform; Whereas, the majority of Micro Enterprises do not fit the loan terms and conditions of Micro Finance Institutions and Banks due to they are high in number and lacked collateral. And CBE has established Micro Credit Department to properly address loan demand from Micro Enterprises. Whereas, Job Creation Commission has taken the initiative to enhance access to finance to the MSMEs and taken the intermediary role between our Bank and MSME; NOW, therefore; it becomes important to develop and introduce the “Micro Lending Policy”. 1.2. Short Title This policy may be cited as “Micro Loan Policy of the Commercial Bank of Ethiopia”. 1.3. Definitions of Terms “Board” means supervisory Board of the Bank formed in accordance with Article 10 (2) and 12 of Public Enterprises Proclamation No 25/1992. “Credit Card Facility” means a revolving facility extended to customers that enable the cardholder to purchase goods and services on credit. “Credit Risk” means the potential that a Bank’s borrower or counterparty will fail to discharge its obligations or a risk arising from any single exposure or group of exposure which can likely threaten the bank to maintain its core operation. “Credit Scoring” means judging or evaluating the desirability of a loan customer based on his/her basic characteristics and past experiences with credit. “Creditworthy” means a borrower with good financial position and performance, generates adequate cash flow, clean track record and other qualities which reasonably assure or honour the full repayment of loans and advances. “Digital Lending” means a remote and automated lending process, largely by use of seamless digital technologies for customer acquisition, credit assessment, loan approval, disbursement, recovery, and associated customer service. “Loan Decision” means the act or process of deciding on loan requests and/or resolution mechanisms as per the Bank’s Credit Policy, Procedure and guideline. “Loan Officer” includes the Bank’s performer involved in credit process: credit origination, collateral valuation, analysis, recommendation.