The Development Bank of Ethiopia has revised the loan interest rates for agricultural projects.
The bank announced a reduction in the interest rate for borrowers engaged in agricultural activities from 11.5 percent to 7 percent.
This revision aims to encourage agricultural activities in Ethiopia by reducing the interest rate charged on loans to borrowers.
The discounted loan interest seeks to utilize uncultivated land resources and encourage investors, farmers, and pastoralists in Ethiopia.
The new interest rate of 7 percent applies to small, medium, and corporate project loan applicants in the agricultural investment sector.
The Ethiopian Development Bank is a government organization established to increase domestic production and substitute imported products in the country.
The bank has requested permission from the government to allocate a portion of its annual profit from customer services to its operations.
In its request, the bank stated its purpose of restoring the country’s development potential, supporting the substitution of imported products, and facilitating the export of goods to foreign countries.
The House of People’s Representatives supported the bank’s request and submitted it to the Minister of Finance, Ahmed Shide.
The bank sought permission to retain all or part of its annual profits.
In response, Minister Ahmed Shide acknowledged the government’s support to the development bank over the past five years, including addressing bad loans, resolving budget deficits, and implementing operational reforms.
He expressed the view that passing legislation allowing the Development Bank to permanently use its annual profits for operations would not be appropriate, but assured that the bank will receive the necessary support to be effective.
