WHEREAS, the formality provided under the Civil Code for the conclusion of mortgage contracts is exerting negative impact on the efficiency of loan provision service which is the day-to day activity of banks and micro-financing institutions;
WHEREAS, the invalidation of existing contracts of mortgage concluded under the prevailing practices of banks and micro-financing institutions for not being notarized, as provided for by the Civil Code, may leave most of the existing loans unsecured with a serious threat to the existence of the banks and the micro-financing institutions and to the country’s overall economy;
NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia it is hereby proclaimed as follows:
