The Ethiopian Parliament on Thursday approves 21.2 billion birr (about US$613M) long term loan to poorly performing Development Bank of Ethiopia (DBE).
The loan to DBE, which is the state strategic financial institution recently reported around 40 percent nonperforming loan (around 16 billion birr or about US$463M), will be interest-free with five years grace period and will be paid in 14 years.
Though DBE had not been doing well for the past years, currently the nonperforming loan of the Bank has declined to 33 percent, according to MP Lemlem Hadgo, chairperson of Budget and Finance Committee at the Parliament. She indicated that providing additional money to DBE will enable the Bank to recover and improve its performance.
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Among the projects, 121 are failed agricultural projects after the investors got loan from DBE without collateral. In most cases, the investors used land leasing paper as collateral to secure the loans and disappear.
Source: New Business Ethiopia