Major Causes Of Project Implementation Delay, The Case Of Development Bank Of Ethiopia Financed Projects

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Addis Ababa University


The Development Bank of Ethiopia is a specialized financial institution established to promote the national development agenda through development finance and close technical support to viable projects from the priority areas of the government by mobilizing fund from domestic and foreign sources while ensuring its sustainability. While financing development projects, however, the bank faces different, in their nature and causes, kinds of problems. One of these problems is delay in project implementation resulting cost overrun, repeated additional loan and loan repayment rescheduling request and wastage of resources especially human resource for jobs that can add little value for the operations of the Bank and in terms of promoting new investments. To have successfully operating projects that can meet the predetermined goals, projects should be accomplished on time, if delayed, the causes must be known first. The aim of the study, therefore, is to assess the major factors for project implementation delay. This study investigates the causes of delay in project implementation for DBE financed projects to determine the most important according to the key project participants; the bank and its customers. The research identifies and analyses whether the major causes of project implementation delay are attributed to clients or the Banks policies, procedures and its operations or whether delay is attributed to some external factors such as government related factors like customs, infrastructure problems, suppliers etc. It is new and not yet researched in the bank. The target projects for the study are selected from the three different types of priority area projects namely; industrial, agriculture and agro-processing projects of the Head Office. The projects are selected using purposive sampling. The project mix in terms of investment costs mainly focuses on big and complex ones. The collected data is analyzed by establishing the relative importance of the various factors identified as responsible for project implementation delay and the degree of agreement between the rankings of any two parties is shown by using Spearman’s rank correlation coefficient (ρ).



Bank, Clients, External Factors