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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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
Description
Keywords
Bank of abyssinia, Government Priority sector Projects