22 May 2012
In the period of February 2012 until December 2012 the Green Farming G2G project ‘Improving competencies of the staff of the Development Bank of Ethiopia’ is being implemented in Ethiopia. Green Farming member Rabobank International will implement the project.
Horticulture is one of the priority sectors within Ethiopia’s Growth and Transformation Plan. The Growth and Transformation Plan envisages an ambitious five-year plan, with a projected Gross Domestic Product growth of 11 – 15% per year from 2010 through 2015. The Development Bank of Ethiopia (DBE) is the state-owned bank in Ethiopia and is an important partner in the implementation of the Growth and Transformation Plan.
The Development Bank of Ethiopia has sufficient resources and offers favourable conditions, including financing upto 70% of the investment without any required guarantee. The interest rate is between 7% and 9%, which is many times lower than the annual inflation (< 25%). In addition, the loan is provided in the local currency (Birr), which with regard to the inflation provides an additional loan advantage.
However, with regard to applying for a loan at the DBE one of the problems is the very long lead time (minimal of 6 months) and the low level of professionalism and agricultural knowledge with assessment of the application. Besides, the DBE uses the strict criterion that an investor should choose the lowest contractor’s offer, which is not always the best choice and usually not cost effective on the long run. Furthermore, in case of a bankruptcy companies are mostly valued too high for resale, which makes it unattractive for investors to take over companies.
In order to improve the competencies of the staff of the DBE and to improve the access to finance for investors, capacity building training sessions will be organised for the DBE in Ethiopia by Rabobank International. The training sessions will be organized according the ‘train-the-trainer’ principle. The trainers will be trained in training DBE staff in advising the horticulture sector on loans and in processing loan request and loans more efficiently and effective. The training program has been prepared and the first training sessions will be held on June 4 until June 8 2012.
Subsequently follow up sessions will be given and the trainers will be given support in training the DBE agricultural advisors. At the end of the year, when all DBE agricultural advisors are trained, a final conference well be held in which the results are presented and shared. There is the possibly of a role out of the training program to other banks.
The expected results of the implementation of the G2G project are:
For more information about the G2G project ‘Improving competencies of the staff of the Development Bank of Ethiopia’, please contact us at email@example.com