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Ethiopia Seeking for Indian Bank

Even if the Ethiopia’s banking industry is close to foreign banks, it is now seeking the Indian banking system, State Bank of India, to engage in it’s economy and open a representative office.

Ethiopia’s Minister for Industry, Ahmed Abetew, said "Previously the Ethiopian government tried to support (investment funds) by availing investment finance with 70:30 ratio - 70 percent loan and 30 percent equity".

Ahmed added, “But nowadays, the demand for loan is higher than available loanable funds". "That is why the presence of SBI presence is very crucial here in Ethiopia for availing investment funds for Indian companies as well as other companies."

SBI is expected to deliver assistance to private investors with feasible project ideas, the Minister added.

Subramanian Venkataraman, country head and CEO of SBI, commented "Ethiopia's economy is predominantly agriculture-based and India is also per se the same but the banks in India have done a tremendous job in promoting agriculture and modernizing agricultural activity by providing soft loans to agriculturalists."

Venkataraman furthered, his company would like to discuss with the Ethiopian government and work with the Ministry of Finance and Economic Development (MoFED) or National Bank of Ethiopia (NBE)., if there is any opportunity.

He also advised the Ethiopian government to work with it’s Indian counterpart in order to understand how the banking industry has enhanced India’s economic development.

Other banks are can also extend their support to the Ethiopian government to bring changes in the Ethiopian banking industry, Venkataraman noted.

"Ethiopia has the opportunity and India has the potential if the two governments work together in the financial sector. Our governments could ensure access to our people appropriate financial products and services needed," he added.

He further asserted NBE should encourage expansion of bank branches, in particular in rural areas and semi urban areas for their significant proportion of household.

Ahmed answering the CEO’s questions said, the Ethiopian government would give any support to have the presence of SBI as it has learned from the results achieved from the ExIm Bank of India, which also has a representative office in Ethiopia.

Source: Business Standard