The management board of the Development Bank of
Ethiopia (DBE) has approved 5.1 billion Br to be
given out in loans this year with the majority of
it, 3.4 billion Br, allotted for development
projects in the industrial sector.
Initially, 4.01 billion Br to be given out in loans
was proposed by Esayas Bahre, the DBE’s president,
at the presentation of the bank’s performance to the
management board on July 23, 2010.
The amount was changed following the announcement in
early August of the proposed Growth and
Transformation Plan (GTP) in which the government
envisions huge increases in the industrial and
agricultural sectors over the next five years.
The approved 5.1 billion Br is planned to be
allocated to around 172 development projects this
fiscal year, according to the new loan scheme the
bank has put forth.
As the biggest lender to development projects in the
country, the DBE plays a major role in achieving the
goals set forth in the GTP, in which the country
expects to double its agricultural output. At the
end of the five years, the industrial sector’s
contribution to the gross domestic product (GDP) is
expected to be 17pc, up from its current
contribution which stands at 13pc.
To this end, 3.4 billion Br, the lion’s share of the
money approved to be given in loans, has been set
aside for industrial projects while 1.7 billion Br
is meant for projects in the agricultural sector and
8.9 million Br for the service industry.
The management board of the DBE, chaired by Melaku
Fenta, director of the Ethiopian Revenues and
Customs Authority (ERCA), has approved 3.5 billion
Br of the 5.1 billion Br to be dispersed this year.
To increase the liquidity of the bank and enhance
its lending capacity, Ministry of Finance and
Development (MoFED) is planning to issue low value
government bonds which the DBE will be responsible
Once they have been issued, bonds with a maturity
date of one to five years will have a six per cent
interest rate and those with longer maturity dates
will have a seven per cent interest rate. All the
income earned from interest on government bonds is
The government bonds are also meant to increase
domestic savings, which is one of the goals set in
The government plans to increase the share of
domestic savings in the GDP to 15.5pc from the
current nine per cent, according to the GTP, which
is expected to be approved in the coming weeks by
the new Parliament that started work on Monday,
October 4, 2010.
“The bank has also prepared its own five-year
strategic plan which is aimed at accelerating the
implementation of the GTP by financing the important
sectors of the economy,” Esayas said in a discussion
with the bank’s clients on September 30, at Harmony
Hotel in Addis Abeba.
During the discussion, the timely decisions of the
officials of the bank, assigning respective experts
to each project, and regular visits to projects were
praised by its clients. Their concern over the
non-flexibility of the DBE’s loan policy and some of
the challenges they face in securing letters of
credit (LC) during transactions was also raised.
The feedback will be taken into account in
delivering better service to its customers, the
bank’s president promised.
This kind of forum with respective clients has been
held every six months since June 2009, following the
Business Processing Reengineering (BPR) which the
bank had conducted at around the same time.
“We are considering holding this forum on a
quarterly basis,” Birhanu Taye, Business Promotion
and Communications Process manager of the DBE, told