Ethiopia and European Investment Bank /EIB/ Signed 70 Million Euro Financing Agreement
The Federal Democratic Republic of Ethiopia signed a financing agreement amounting to 70 Million Euro (Approximately ETB 1.8 Billion) in the form of credit with the European Investment Bank at a ceremony held at the Radisson Blue Hotel in Addis Ababa.
The proceeds from the Loan will be used to increase access to finance for Small and Medium Enterprises (SMEs) in Ethiopia, operating in the manufacturing and agro-processing industries through establishment and operation of a credit facility that provide access to finance for leasing finance and working capital.
During the signing ceremony Mr. Getahun Nana President of the Development Bank of Ethiopia /DBE/ said the credit facility hugely help to provide access to finance for the missing middle.
On his part European Investment /EIB/ Bank Vice-President Mr. Pim Van Ballekom reflects the project demonstrates both the firm commitment of the European Union to support private sector investment across Ethiopia and increase access to finance in Africa. This also reflects the strengthened engagement to increase EIB activity in Ethiopia since the opening of ours office two years ago.
Mr Admasu Nebebe State Minister of MoFEC remarks in his speech, industrialization has now become indispensable in the renaissance drive of the country. This vision of industrialization will require a considerable amount of credit to the private sector, especially to the SMEs. This will be very important to the country as SMEs would stimulate economic growth, create employment opportunity and reduce poverty. In this regard, the Government has given attention in its industrial policy and SME development strategy, which is also reflected in the previous country plan and the ongoing GTP II, with more emphasis now to the promotion of financial inclusion.
The flow of funds will involve Development Bank of Ethiopia; participating financial institutions (i.e. lease companies, commercial banks and micro-finance institutions to the final beneficiaries. The project is being jointly financed by the World Bank.
SMEs will be provided with tailored business development services to address the issues of developing bankable business plans, quality of financial records, managing risks, business development and management.
Mr. Getahun Nana President of the Development Bank of Ethiopia /DBE/ and Economic Cooperation and Mr. Pim Van Ballekom, Vice President of the European Investment Bank signed the agreement.
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