Development Bank of Ethiopia resumes commercial farming loan

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The Development Bank of Ethiopia (DBE) recently announced plans to reintroduce a loan program for rain fed commercial farming as of February 1. Last March the state owned bank halted the loan program because of scandals observed by agricultural investors in Gambella. However, according to a statement DBE sent to Capital, the government reversed course and will begin approving loans for rain based farming investment starting next week.

All the experts at DBE are also getting an extensive training. Sources at DBE told Capital that the goal of the latest training is to help bank employees become more competent in technical evaluation and follow up of loans for rain fed commercial farming investment. “All experts from DBE branches throughout the country are attending the training,” sources said.

According to the latest study undertaken by the Prime Minister, loans were previously approved and given for up to three investors on similar plots of land in the region. However their performance was not strong. From the total expected investments in Gambella only 18 percent has been developed, in spite of the fact that almost two billion birr in loans has been released to 194 investors.

The report cites lack of appropriate follow up the investment in land and mistakes by employees along with unprincipled estimates of the cost of land development as reasons for weak results in regional rain fed investment. The study indicated that only two percent of regional investors were included in the loan scheme.

However, famers in Gambella who Capital interviewed countered that the study was limited and did not take into account the corruption that actually occurred in the region. They claimed that if the study was undertaken properly it can discover further sabotages and trouble makers who misused public money.  Gambella Diaspora invited by the government to invest in the region also complain that the bank has not been supportive.  They argue that they brought significant knowledge, skills and investment capital from abroad

The long serving president of DBE, Essayas Bahire, was removed from his post about two months ago.

source: http://capitalethiopia.com