State-owned Commercial Bank of Ethiopia (CBE) says it will adopt a technologically advanced letter of credit (LC) mechanism as a result of a business process re-engineering exercise carried out by the bank.

A report quoting CBE sources says pilot testing has already started at three of the nearly two hundred branches the bank operates throughout Ethiopia.

Increased demand

The bank says L/C demand has increased substantially in line with a dramatic rise in demand for imported completed products, raw materials and components.

"A central processing unit will be installed [that] allows importers and exporters to interact without any documents manually transacted," a bank source apparently told local media. CBE officials however declined to comment on the details of the new system.

Web-based system

An IT expert with knowledge of the new system suggested that customers will now be able to complete L/C financing "in a transparent, efficient and secure environment ... through a one-stop web-based format."

The installed system helps CBE in maximise customers' working capital by increasing the speed, accuracy and visibility of the LC process, he added.

Branch trials

CBE is Ethiopia's largest bank, with 197 branches throughout the country.

The three branches reportedly piloting the new L/C system are in Arada, Addis Ketema and Temenja Yajz.

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