Development Bank of Ethiopia (DBE) is to revise its lending policy in the coming few weeks, The Reporter has learnt.
DBE’s management staff has been in an extensive discussion over the revision of its lending policy for a while, now. It is now expected to present the proposed changes to stakeholders.
“The proposed changes will be presented to stakeholders soon,” Hailu Misganaw, acting communications director of the Bank, told The Reporter.
The proposed changes are expected to make adjustments among other things on bank’s 12 percent lending interest rate.
“There have been comments from the business community to reconsider the lending interest rate and reduce it to nine percent,” according to sources from the Bank.
According to the same sources, the bank is expected to revise the lending interest rate in accordance with the comments as well as the latest currency devaluation.
The bank is also expected to introduce changes and clarify its objectives as far as commercial farm investment is concerned.
There has been ups and downs regarding this particular sector; and the new policy is expected to clear up the confusion in this regard, a senior official from the Bank told The Reporter.
Over the past two years, the bank has been in a turbulent environment where many of its senior staffs were removed from their posts following the coming of Getahun Nana, as the new president from his vice governorship at National Bank of Ethiopia. He replaced, the long standing president, Esayas Bahre, in November 2016.
The departure of Esayas came just after the releases of a very controversial report on commercial farm operations in Gambela. The report which was compiled by the Prime Minister’s Office focused on loans disbursed to large commercial farms in Gambela.
The report has revealed that the loans were not used for their intended purposes by the investors and that the then officials of the Bank have failed to monitor the investment projects.
The report has finally cost Esayas his job, which he retained for eight years.
Following this, the bank went through a series of reshuffles and managerial changes. This year alone, the bank removed four vice presidents who served under Esayas. Instead, the Bank has brought new faces to the top leadership position.
The Bank has also reshuffled different midlevel manager and directorial positions.
As of June 30, 2017, DBE reported 323.85 million birr net profit, a 13.3 percent decline from its previous year performance.
However, last year’s performance was still far from the Bank’s net profit of 681.4 million birr, reported in 2015. During the 2016 fiscal year DBE has registered 373.5 million birr net profit, significantly lower than its 2015 performance. To the contrary, from 2011 to 2015, the bank was able to improve its profit for five years in raw. In this regard, the Bank has reported 204 million birr and continued to increase the amount till it experienced its first decline in 2016.