Undeveloped joint venture between local, foreign banks affecting former's performance

Addis Ababa, August 31(ENA)-- The absence of relevant laws that would enable local banks to work in joint venture with foreign banks with huge capital has adversely affected their endeavors for better performance, President of the Ethiopian Chamber of Commerce said.

Brehane Mewa said the fact that local banks don't work in joint venture with internationally renowned banks and focus only on commerce incapacitated them not to broaden their scope of activities.

Brehane was speaking here on Saturday during a discussion forum between banks and the business community on issues related to bank loans.

Brehane also indicated that the short period of time set by the National Bank of Ethiopia (NEB) for repayment of loans and its decision to quickly sell in auction the collateral of borrowers was posing a serious problem on businesspersons.

He said taking such hasty actions instead of trying to evaluate the problems of each borrower in detail, further widens the gap between the two parties.

The government should formulate a vivid credit system that governs all banks so that the problems encountering the business community in this regard would be addressed.

Governor of the NEB, Tekle-wold Atenafu, said on the occasion that NEB has opened a new banks control department that meets internationally recognized requirements.

The bank would design the necessary criteria that banks should fulfill to get licenses, and evaluate the financial status and performance of banks.

Officials of governmental and private banks as well as members of the business community had attended the half-day discussion forum.

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