DBE approves 8.7 bln birr for loan provision

The Development Bank of Ethiopia (DBE) announced that it planned to disburse 8.7 billion birr as loans for development projects in the current budget year.
DBE, one of the three state-owned banks which focus on loan stipulation for different development activities in the country, has decided to increase the amount that will be available for loans by 550 million birr in the 2013/14 fiscal year, when compared with the past fiscal year. According to Birhanu Taye, Public Relations head of DBE, the bank has plans to increase profit earnings by 34 percent more than the profit it amassed in the 2012/13 fiscal year. During the past fiscal year, the bank earned 491 million birr from its banking activities.  
The bank has also advanced an 8.15 billion birr loan for development projects. It had exceeded the initial planned loan by 250 million birr.
Birhanu told Capital that the bank has also targets to further reduce nonperforming loans by 5.6 percent, which stood at 8.6 percent in the past budget year. According to the statement from DBE, three years ago the nonperforming loan rate had been 33.55 percent.
Even though the bank has set forth ambitious plans for the current fiscal year, the bank bond sales projection has declined by 36 percent from the previous year’s projection. In the past fiscal year the oldest bank in the country targeted to sell 2 billion birr worth of bonds locally and for the Diaspora, while it has been able to collect 1.4 billion birr. “In this fiscal year we targeted to start from low at 718 million birr, however it may be revised based on the performance within the year,” Birhanu said.
DBE is the body responsible for handling the government bond sales that was launched two years ago to raise funds for the construction of the Grand Renaissance Dam, a hydro electric project that will generate 6,000 megawatts electric power.
The bank statement indicated that the projects that got advance loan approval in the past fiscal year shall be able to generate 2.6 billion birr worth of hard currency for the country and may increase government revenues by 5.5 billion birr.
The bank management that conducted their annual meeting a week ago in Bahir Dar town, 550km north of Addis, has evaluated the annual performance of the bank and approved the current year plan.
Industry and agriculture are the major sectors that receive long term loans from the bank.