The Development Bank of Ethiopia (DBE) has set aside 10 billion Birr as it plans to continue providing financial access for Small and Medium Enterprises (SMEs).
The bank has allocated 10 billion Birr to provide for SMEs in the form of loans during the current Ethiopian 2022/23 fiscal year, DBE President Yohannes Ayalew (Ph.D.) told Ethiopian Press Agency.
The bank has been supporting business enterprises through organizing them in share companies last year, Yohannes said. Short-term and long-term trainings were also offered for over 28,000 SMEs to enhance their knowledge and skill in business last year.
DBE provides loans for Commercial Agriculture, Agro-Processing, Manufacturing, and Extractive Industries, particularly export-orientated businesses.
Bad Loans Dropping
The 10 billion birr finance for SMEs was mad available following a relatively successful year that saw the bank collect 10.9 billion Birr from the loans offered to its customers.
This helped DBE to bring down the level of bad loans to 17%, excluding projects in the Tigray region, according to the president.
The fact that several projects in Tigray went into bad debt has been making the year challenging for the bank, DBE President said.
However, he said that the bank took quick measures to mitigate the problem that reducing its bad loan level in 2021 from 15 billion to 9 billion Birr now, excluding Tigray.
“So far,” he said, “the bank has been registering a successful result in relieving the bankrupted companies” saving over 300 companies from bankruptcy.
It also secured 3.8 billion Birr in annual profit, according to Yohannes.
In the current fiscal year, DBE officials plan to collect 14 billion Birr from loans and bring the level of bad loans down to 10%