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The Ethiopian Public Private Consultative Forum (EPPCF) presented a study on accessing finance easily.  The study indicated that loans to the private sector declined by 11 percent within the last five years.  
If financial services are available and affordable they can create jobs and grow the economy but according to the study 70 percent of small and medium enterprises can’t access finance easily. Furthermore, shares of private sector loans declined from 24 percent to 13 percent between 2005 and 2010.
The government counters that financing for the private sector is available and even increased. “The industry development policy is the government’s strategy. Development Bank of Ethiopia for instance has dispersed over 2 billion birr as of March 2014,” Teklewold Atnafu, Governor of the National Bank of Ethiopia (NBE), said during the forum that was held at the Sheraton Addis on June 6, 2014. “This indicates that the financing sector is strongly supporting developmental projects but still the demand is very high,” he added.
According to the governor, in the past nine months 23 percent more loans were provided by banks compared with a similar period of the past year. He argued that the loan provision is growing, although some problems still exist.
According to him, NBE has a reserve of 8 billion birr and they have the capacity to issue loans.  The governor says that deposits reached 273 billion birr during the nine months of this fiscal year. It is a 29 percent growth from the 198.5 billion birr in the middle of 2010.
Teklewold said that the total loans that private banks dispersed in 2010 was 184 billion birr but that figure has grown by 36 percent to 263 billion birr now.
According to Teklewold, the loans for agriculture and housing are 11.4 percent and 13 percent of the total loans dispersed based on March 2014 data but the study said the amount for agriculture and housing was insignificant.
The latest report of NBE states, the private sector’s share of loans is also 43 percent.  
The study points to administrative and regulatory hurdles in getting loans and foreign exchange, absence of capital market and a vague definition given to investment funds. Some of the changes suggested by the private sector include revision of the 27 percent bond purchase requirement on loans.
“The 27 percent bond collected from banks is money that came via the Development Bank of Ethiopia,” the Governor argued.  He also accused commercial banks of changing their tactics and extend short term loans to long term loans so as not to pay the 27 percent bond purchase requirement.
According to the study, for every 1,000 requests, only two are able to obtain loans. This is actually a big difference when compared with other east African countries.  
Eyob Tekalign, manager of EPPCF, who presented the study also talked about how difficult it is to obtain hard currency from banks. He pointed to corruption and lack of transparency as a major problem. The private sector is expected to come up with 100 percent collateral in order to open a letter of credit. Moreover importers are only allowed to obtain USD 5,000 in foreign currency as an advance payment when they want to import items.
Lack of integrity between banks, the tax authority and the National Bank are also affecting the hard currency market. “The study recommended that a strong relationship between relevant government offices and a clear directive that governs the foreign exchange will ease the problem.
Micro finance institutions (MFI) are seen as one solution, the study recommends lifting rules prohibiting them from using foreign exchange and letting them loan more than one percent of their capital while at the same time letting them borrow from banks.   
Capital lease
The Governor says plans are in the works to open a capital market.
Currently four regions and Addis Ababa have formed lease financing companies that will provide loans to help form micro and small scale enterprises. These include: Tigrai, Amhara, Oromia and SNNP, and the Commercial Bank of Ethiopia has allocated 2 billion birr for these financing companies for the coming year.
Operating lease and lease financing that allows the enterprises to secure machines as rentals or long term purchasing from lease financing companies controlled by regional governments is another possibility.
The companies are expected to commence a financing scheme in the coming fiscal year which begins next month.