The opportunities and challenges of lease financing in Development Bank of Ethiopia
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Date
2019-06
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Addis Ababa University
Abstract
The main objective of this paper is to assess the overall opportunities and challenges
of lease financing service in development Bank of Ethiopia. Leasing is financing in
kind and DBE has been providing lease financing service in the form of supplying
capital goods to small and medium enterprises since 2016. The research approach
adopted in this study was a mix of quantitative and qualitative approaches. Both
primary and secondary data were used. In identifying the respondents from the
study population, purposive sampling was adopted. All District offices of the Bank
and selected work units from Head office were included in the sample. The study
identified opportunities of lease financing and got high level of agreement by
respondents. The level of agreement on opportunities questions responded as lease
business sector, strong support from the government, leasing business opportunity for
employment creation, new investment opportunity and contributing for SMEs
development. The study also found out that the major internal and external challenges
of the lease financing in DBE are high lease NPLs, tight lease requirements, lack of
hard currency, inadequate MIS, policy and procedure amendments repeatedly, and
lack of capital. Based on the survey and interview results the researcher forwarded its
conclusion and recommendation.
Description
A Research Project Submitted to College of Business and Economics in
Partial Fulfillment of the Requirement for the Award of Masters of
Business Administration
Keywords
Development Bank of Ethiopia, Lease financing