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Ethiopia: New banking window aims to support SMEs transition to larger companies

28.10.2014

The Development Bank of Ethiopia (DBE) has announced that it is about to launch a new financing window dedicated to small and medium-sized enterprises (SMEs) transitioning to a larger size.

The Development Bank of Ethiopia (DBE) has announced that it is about to launch a new financing window dedicated to small and medium-sized enterprises (SMEs) transitioning to a larger size.

According to the DBE's president Esayas Bahre, the new window aims to fill the financing gap that medium and large enterprises face when making the transition from SMEs. 

He told The Reporter that micro finance institutions are mainly dedicated to serving the financing needs of the SMEs but once these companies reach a bigger size, they no longer qualify for microcredit and thus suffer from a financial shortage.

Besides, the DBE is also planning to make significant changes in collateral requirements when financing a project. 

Businesses no longer have to provide 30 percent of the cost of a project in cash before applying for a loan. They can instead use physical assets as collateral.ADNFCR-2976-ID-801756766-ADNFCR