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The Development Bank of Ethiopia has made a significant announcement regarding a considerable reduction in interest rates for loans extended to projects within the agricultural sector, particularly targeting small medium-scale endeavors and corporate initiatives.
This strategic decision, unveiled through the Bank’s official social media platform on Friday, reflects a noteworthy shift from the previous interest rate of 11.7% to a considerably reduced rate of 7%.
Highlighting the rationale behind this interest rate adjustment, the 113-years-old state-owned institution, that prides itself for project-based lending approach, aims to incentivize and invigorate investment in Ethiopia’s agricultural landscape.
Yohannes Ayalew, President of the Bank, emphasized that the endeavor is to unlock the vast untapped potential of Ethiopia’s arable land by encouraging investors, farmers, and pastoralists. To this end, the Development Bank of Ethiopia has introduced a substantial interest rate reduction, from 11.5% to 7%, for borrowers engaging in agricultural ventures across small, medium, and corporate project scales.
The Bank envisions this strategic policy as a catalyst for comprehensive economic transformation at the national level. By fostering investment in the production of both food crops and raw materials for industrial use, it seeks to bolster domestic production and consequently reduce reliance on imports. This initiative also aims to stabilize the prices of essential food items within the country, thereby addressing concerns regarding inflationary pressures.
Furthermore, as part of its commitment to Ethiopia’s economic growth trajectory, the Bank said, it disclosed a marginal interest rate adjustment for borrowers involved in specific sectors and large-scale projects. While names of these sectors are unspecified, this decision was informed by prevailing market dynamics – it was said.
The Development Bank of Ethiopia remains resolute in its mission to drive sustainable economic progress, leveraging strategic financial measures to empower diverse sectors and catalyze the nation’s development agenda.
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