The Ministry of Labor and Skills has disclosed that banks are not complying with National Bank regulations by failing to provide loans to enterprises.

The Minister of State for Jobs and Skills, Nigussu Tilahun, highlighted that although the National Bank mandated banks to include enterprises in their annual credit plan, they were not following through. According to National Bank guidelines, banks are required to allocate five percent of their annual loan plan to enterprises, but this is not being implemented. The National Bank directive also emphasizes the need for banks to open a window and cater to enterprises, which is not happening.

Nigussu Tilahun revealed that the ministry had a lending system aligned with the National Bank and stressed the importance of coordinating with financial institutions to support enterprises. The ministry has established a monitoring system to track loans to enterprises, extending its oversight to states and sub-structures. The Minister of State noted that despite quarterly reporting on loan provisions, challenges persist in the sector. He emphasized the necessity of aligning organizational guidelines with practical implementation to ensure the health of the job market, viewing this alignment as a source of strength and resources for the ministry.

Source: Addis Zemen