The Role of Private Banks in Financing Government Priority Sector Projects: the Case of Bank of Abyssinia

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Date

2015-06

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Publisher

Addis Ababa University

Abstract

The purpose of this case study is to investigate the role of Bank of Abyssinia in financing the government priority economic sector projects. The study used qualitative and quantitative research approach. Equally, the nine years data of BOA analyzed and primary and secondary source data. The analysis and reviews reviewed using the comprises bank's annual reports and document from 2005 to 2013 with period. Beside this the study has also used the interview. The study result shows that BOA has achieved significant progress; such as, growth of paid-up capital, the expansion of network branches, increase of deposit, increase of saving level of the customer, technology application and loan provision. Despite their continuous improvement in all aspects, there are limitations in their capacity to attract a large number of clients with respect to other competent private banks, limited financial capacity and the government loan provision ceiling. Moreover, loan provision for government priority economic sector projects such as agriculture and industry is relatively very low and insignificant. This is the result of the bank failure to have sufficient awareness about the country's priority economic sector projects and the loan policy related to them. In conclusion it is recommended that the BOA should strive to optimize its resource mobilization by maintaining objectives of the bank alongside with maximizing their contribution to the country's socio-economic development

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Keywords

Bank of abyssinia, Government Priority sector Projects

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