Development Bank ready to give up to 200 billion birr loan
The Development Bank of Ethiopia announced that even if the Bank has sufficient financial arrangements, it has not received any requests from the manufacturing industries
Although the Ethiopian Development Bank has made adequate financial arrangements to support industries, the manufacturing industries have not submitted loan requests as often as required. The number of requests to establish large factories is not sufficient in terms of the financial capacity the bank has built. As Yohannes Ayaleu, President of the Ethiopian Development Bank (Dr.) stated regarding the performance of the policy bank for the 2015 fiscal year on July 27, 2015, E.C.
Dr. Yohannes stated that although the bank has received as many requests for mega projects as expected, The Bank has not received loan requests for investments in the manufacturing sector.
Development Bank has released more than 14 billion birr loans for two cement projects
It is said that the Development Bank has created the capacity to finance up to eight billion birr for one project, for example, it has financed two cement projects for a total of more than 14 billion birr in the last fiscal year.
“Many projects were supposed to come, but they didn’t, so the bank didn’t give out funds. In its current state, although it can handle (lending) up to 200 billion, what it has lent in the fiscal year is very low,” said Yohannes (Dr.), in the past (before the reform) Development Bank projects were presented to him, and there was a problem of fairness and approval, but now the projects that have come to him
Yohannes (Dr.) also stated that the country’s demand for cement from cement factories is huge and that there is a gap of more than 70 percent of demand and supply in the current situation, and if further investment is not made in the sector, this gap will increase to 88 percent
In particular, although the country’s demand and supply of cement will not be filled in a short period, he explained that the Development Bank plans to close this gap in the coming years.
The president said that all mega projects of the manufacturing sector, including cement projects to be built in any part of the country, must meet the requirements of the Development Bank and come to the Development Bank
John (Dr.), stated that due to the operational problems of the Development Bank itself, the requests for other such projects, including cement factories, were delayed because they were not approved in time.
At present, the government has announced that they have received responses from the improvement measures taken by the bank in connection with the reform.
In 2013, the bank improved its performance by implementing various new strategies. 4.3 billion birr, 3.9 billion birr in the fiscal year 2014, and 6.4 billion birr in pre-tax profit. The bank has increased its capital from 2.6 billion birr three years ago to 38 billion birr and has announced that it was able to approve 46.4 billion birr loans in the fiscal year ended.
In addition, the disbursement of more than 19.3 billion birr from the approved total loan was explained, and it was mentioned that 13.5 billion birr was able to be collected according to the contract. According to Yohannes (Dr.), at the end of the fiscal year, the bank’s total assets reached 160.8 billion birr, and the total capital was 38
Acting Vice President Corporate Services of Ethiopian Development Bank, Getachew Balai, said that the bank’s reform has increased the number of districts from 12 to 24, the number of branches from 78 to 100, and made it accessible to all areas of the country.