The SME Finance Project (SMEFP) held a strategy session on Friday, March 8, 2019, at Intercontinental Hotel, Addis Abeba. The session was organized by EP with a theme of ‘’Mitigating Risks and Managing NPLs in Lease Financing’’ for the DBE Executive Management team. The session was organized to present and discuss the risks and challenges of DBE’s Lease Financing activities. A survey conducted by Enterprise Partners, which focused on 5 processes including a screening of applicants; Evaluation; Branch Approval; Procurement and Completion of the transaction, found that processing new leasing currently takes 18 months. In order to improve financial reporting, it was advised to change proclamation 103/1996 Art 16 and adopt IFRS.
EP Further noted that DBE should change its leasing modality from hire purchase to finance lease to tackle risks and challenges of lease financing. At the end of the session, Ukrainian leasing experiences were raised and discussed by the participants. The EP SME team particularly emphasized the need to look forward and having a growth orientation by purchasing lease equipment from familiar brands and making the application process short. As an outcome of the discussion, Enterprise Partners and DBE’s executives agreed to work together to improve DBE’s current lease financing activities and undertake similar discussions in the future.