Transcript FTF Fasika - Ethiopia CIAFS

DEVELOPMENT
CREDIT AUTHORITYDCA
PRESENTATION TO FTF PARTNERS 2nd
QUARTRLY COORDINATION MEETING
Overview of DCA In Ethiopia
• The major objective of DCA is to support the development of
key Economic Sectors and financial markets through
mobilization of public fund and demonstrate the sustainability
and profitability of Credit operation under represented
economic Sector (SMEs engaged in different activities)
• DCA programs have been implemented since 1999 at Global
and National levels in order to facilitate increased lending via
partnerships with local private banks. As a result, in Ethiopia
more than 38 million USD loans have been disbursed to
business enterprises with a subsidy cost of $3.2 million USD,
which leveraged $1: $12
• Currently, Ethiopian DCA have been expanded to provide
enhanced coverage to agriculture enterprises (Small
Agriculture farmers & Coop unions) and health care
institutions.
DCA –Way of doing Business
Background
Approach
• Needs Partnership agreements with local private banks
• USAID provides 50% of borrower’s collateral needs
• In the case of default, Partner banks reimbursed the net
principal of loan provided on basis of the agreement
• All loans made with partner banks’ funds
• Due diligence and credit decisions made by lender
ACTIVE ETHIOPIAN DCA LPG
StructureDCA
• Agricultural Equipment Financing
• Health Care DCA
• Diaspora owned business enterprises LPG
• Women owned business enterprises LPG
NEW SIGNED LPG STRUCTURE
Health care
• A US$13.5 million, multi-bank loan portfolio guarantee
for private health providers offering HIV/AIDS and TB
services
• Equipment financing facility shared by two private
commercial banks - NIB Bank and Bank of Abyssinia
• A US$7.3 million, multi-bank loan portfolio guarantee
for six years
Agriculture
• Equipment financing facility shared equally by two
private commercial banks - Bank of Abyssinia and
Zemen Bank
• Many applicants were submitted their BP to partner
banks with the support of Serengeti-Capital TA &
waiting for banks decision
EXPECTED IMPACT
Results
Long-term
goals
•
Enable financing of bankable projects that haven’t an
opportunity to get loan without providing Collateral to banks
•
Partner banks increase lending in agricultural sector – especially
financing for agricultural equipment
•
Targeted small holder farmers and agro-processing industries
will have opportunity to accumulate capital assets that enable
them to maximize their farming activities
•
Increase the diversity of employment opportunity and income in
rural areas
•
Create a sustainable partnership between private sector &
financial institutions, which enable partner banks to develop
their own strategy for expanding lending to targeted business
w/o guarantee requirements
•
Additional local banks will be attracted in DCA mechanism, and
introduce Agr-Equip leasing business
•
Contribute the achievement of FtF objectives in poverty
reduction & Economic growth in targeted regions
SERENGETI CAPITAL’S ROLE
Health care
Agricultural
equipment
leasing
Technical
assistance
Women
entrepreneurs
Diaspora
• Provide technical assistance
under the various programs as
follows:
– Serve as a point of contact
for DCA implementation &
monitoring
– Provide borrower focused
TA
– Provide bank focused TA
BORROWER FOCUSED TA
Business
development
• Assist with business plan development
• Review Business plan and cash flow projections
• Appraise Feasibility studies
• Advise on bank regulations and guidelines
• Business registration assistance
• Training on business skills & knowledge
Advisory
Services
• Advise about the requirements of DCA guarantee
loans
• Link potential borrowers with appropriate banks
BANK FOCUSED TA
• Training on SMEs lending mechanism
Capacity
building
• Training on credit-risk analysis and cash-flow lending
• Pre-screening and referrals of potential beneficiaries
• Evaluation of potential projects eligibility & requirements
at field level with bank staffs
• Monitoring and Supervision of beneficiary projects
performance on the field
Marketing
assistance
• Designing & promoting a lending product using the
guarantee scheme
• Advising on setting up specific lending units in the bank to
promote new products around guarantee
• Develop Outreach strategy to potential borrowers
targeted by guarantees