Access to Finance, daunting for Private Sector in Ethiopia, a high profile panel discussion divulges
(Addis Chamber, April 11, 2024): Hosted by Addis Chamber, a high profile discussion forum convened to discuss on the impact of credit access to businesses in Ethiopia.
As one of those advocacy platforms of Addis Chamber, the event dubbed “Access to Finance for Businesses” has attracted key stakeholders drawn from government and non-governmental financial sector, development banks, Micro Finance Institutes, research firms among others.
In his introductory remark, Shibeshi Bettemariam, Secretary General, from Addis Chamber, underlines that the latest event is one of the series advocacy platforms designed by Addis Chamber with intent from board of director.
According to the Secretary General, the series of advocacy events will continue in the coming months with special focus on the challenges of doing businesses environment, rule of law, taxation among others.
While delivering her opening remarks, Mesenbet Shenkute, President of Addis Chamber, reiterates the issue of access to finance to be among those burning issues to be advocated in the Chamber and it will remain as one of the central agendas to be discussed among stakeholders.
Despite all the efforts, access to finance for private sector is not yet full addressed, said the president and so that Addis Chamber will go on voicing such concerns until such demands are met or addressed.
The high profile panel also hosted series of presentations that are later discussed.
Belete Folla, Bank Supervision Director, from National Bank of Ethiopia highlighted the current directives, policies and regulations provide by NBE to facilitate optimal finance provision to private sector and other loan seekers.
Such legal frameworks, as he said, are deemed to provide easy and fair access to finance.
However much has remained to be done to meet the demand of credit service as there are impediments witnessed in loan delivery.
Getachew T/Mariam, another panelist from African Financial Accountability and transparency Office shared the existing challenges, trajectories and opportunities concerning access to finance for private sector in the Ethiopian context.
With fast growing monetization economy witnessed in Ethiopia, a new window of opportunity is emerging to diversify access to finance, one of the major constraints facing the Ethiopian private sector.
As compared to Sub-Saharan African Countries, access to finance still remains at low with 30.8 percent provision to private sector as compared to 64 percent in SSA.
With the growing demand and supply gap observed, concentrations for credit provisions are at high in urban areas as compared to rural areas with vast population.
Tewodros Hailu, Bank transformation Director, from Awash International Bank highlighted major challenges facing commercial banks in providing access to finance for private sector.
In his remark he said that access to finance is dominantly provided by 3 banks with covering 67 percent and yet liquidity , exaggerated collateral , lack of robust due diligence still remains major challenges.
Senior experts from Development Bank of Ethiopia made their presence at the panel sharing the experience of DBE and its role in bolstering trade and investment in Ethiopia.
In order to embolden private sector, DBE, according to an expert from the Bank, said that it has provided short, medium and long term loan provisions with the total capacity of 38 billion ETB, with ruined credit score of 7 percent as compared to 40 percent some 6 years ago.
DBE also priorities sectors such as agriculture, industry, mining, tourism and renewable energy projects to get loan.
Succeeding the presentation participants of the panel have forwarded opinions and concerns to panelists to be shared and addressed by policy makers for better access to finance that accelerates fast development.
Some of the major issues raised include among others the need to find out alternative sources of finance other than deposit dependency, the need to ease inflation to embolden deposit , policy provision to facilitate loan from international financiers , endeavoring to make policy makers as part of such advocacy efforts , the need to resolve security issues and corruption and bribery while getting loans.