in

DBE asks for 300 million USD injection

[ad_1]




Yohannes Ayaleu, president of DBE (Photo: Anteneh Aklilu)

The Development Bank of Ethiopia (DBE) requests the National Bank of Ethiopia for 300 million dollars so as to provide foreign currency to its customers. The policy bank similarly has tabled 30 billion birr to be approved for provision of loans during the current Ethiopian 2022/23 fiscal year.
During the annual review of DBE’s performance by the Public Enterprises Holding and Administration Agency (PEHAA) held Thursday this week, Yohannes Ayaleu, president of the bank indicated that there was an increase and high investment demand despite having limited resources. And as the president indicates, the bank projects a 30 billion birr need to bridge the gap in the loan department.
Similarly, in order to fulfill its customers demand in terms of foreign currency the bank has requested NBE to facilitate 300 million dollars. “We have been getting foreign currency from projects that we have provided loans to, mainly from the horticulture sector. However as lots of projects have finalized paying their loan, thus we require some foreign currency to stay afloat,” said the president.
“Most of the foreign currency sources in the country stem from various sectors development progress,” added president.
The bank announced that it has collected 10 .9 billion birr from the loans it offered to customers during the just concluded fiscal year. Moreover, the development bank was able to bring down the level of non-performing loans to 17 percent, excluding projects in the Tigray region.
The president also disclosed that several projects in Tigray region went into bad debt making the year quite challenging for the bank.
According to Yohannes, the bank collected nearly 11 billion birr from loans and earned a profit of 3.9 billion birr during the fiscal year which was 3.3billion after tax and 600 million birr in dividends paid to the government.
“The bank took quick changes to mitigate the problem and was able to reduce the bad loan level in 2021 from 15 billion birr to 9.1 billion birr in the fiscal year excluding Tigray,” the president stated whilst highlighting progress made by the bank.
According to the president, the Non-Performing Loans in Tigray are at highs of 10 billion birr increasing from 2.4 billion birr before the conflict in the region broke out. In parallel, the European Union has also withheld 70 million Euro’s it had approved to DBE after the war broke out.
With regards to Non-Performing Loans, the development bank has forged synergetic partnerships with partners for companies who are struggling to pay loans.
“We have saved four companies with a combined loan of 6 billion birr, by partnering them with potential partners so as to pay off their debts,” explained the presidents on instances where they rendered assistance.
The bank is also negotiating with potential investors who are interested in buying Ayka Addis, which has been up for sale for years but repeatedly failed to get bought.
“We are negotiating with local potential buyers and we expect positive a result soon,” opined Yohannes.
The bank has planned to collect 14 billion birr from loans in the upcoming fiscal year by strengthening its effort. Similarly, the bank has also set to bring down the level of bad loans from 17 percent in the previous fiscal year to 10 percent in the current fiscal year.
DBE at its core of operations provides loans for commercial agriculture, agro-processing, manufacturing, and extractive industries, particularly export-orientated businesses.
“The bank is planning to support business enterprises through organizing them in share companies. Short-term and long-term trainings were also offered for over 28,000 SMEs to enhance their knowledge and skill in business,” explained the bank’s head.
During the annual review which was led by Finance Minister, Ahmed Shide, the low performance of lease financing was seen as a gap for the bank and suggestions were made to increase the performance of lease financing through giving due attention to the matter. Likewise the Bank’s project performance was found to be low and suggestions were made to improve DBE’s performance for future. At the review meeting, direction was also given to increase the forex acquisition.



[ad_2]

Source link

What do you think?

Aggregated by Ethiopian News Digest

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

MassDel set to transform freight transport

Ethiopia’s debt distress slows – Capital Newspaper