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DEVELOPMENT BANK OF ETHIOPIA

RISK MANAGEMENT PROCESS

REVISED CHECKLISTS OF REQUIREMENTS FOR ALL LOANS

January, 2010

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I. CHECKLIST OF REQUIREMENTS FOR ALL LOANS

1. LOAN APPLICATION
2. LICENSE
2.1 Temporary/permanent work permit/ for foreign investors.
2.2 Investment certificate
2.3 Principal Registration Certificate
2.4 Tax payer Identification Number (TIN)
3. LAND
3.1 Contractual lease agreement that extends to 5 years after the full
Payoff period of the loan (if applicable)
3.2 Title deed certificate or proof of ownership

4. ENGINEERING
4.1 For Industrial project
4.1.1 Approved Blue Print of Architectural Plan
4.1.2 Approved Blue Print of Structural Plan
4.1.3 Approved Blue Print of Sanitary Plan
4.1.4 Approved Blue Print of Electrical Plan
4.1.5 Bill of Quantity (in soft and hard copies)
4.1.6 Approved site plan
4.1.7 Construction permit
4.1.8 Take off sheet
4.2 For Agricultural project
4.2.1 Approved construction plan (Blue print)
4.2.2 Bill of quantity (in soft and hard copies)
4.2.3 Approved site plan
4.2.4 Construction permit (for urban area)
4.3 For Agro- processing project
4.3.1 All requirements listed under 4.1 for urban area
4.3.2 All requirements listed under 4.2 for rural area

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5 PRO-FORMA INVOICES
5.1 Three pro-forma invoices (for multiple suppliers)
5.2 Single pro-forma invoice (for sole suppliers or manufacturer )
The pro-forma invoice:-
- should have specification and catalog including country of origin.
- should be presented from legitimate suppliers or manufacturer.
- should be of the same capacity and quality.
- Should be for major items.
5.3 For turnkey supplies bid results should be submitted (if applicable)
6 UTILITIES
6.1Written confirmation for the availability of electric power and
Water with indicative cost from the responsible authorities as
deemed necessary.
7 POWER OF ATTORNEY
7.1
A Power of Attorney for loan applications submitted through an
agent or any other third party.
8 TRACK RECORDS
8.1 Business track records as per the following details if the
applicant has other businesses
Ser. Name of the Business Status of the
No. applicant address business

N.B:- Please attach audited or provisional financial statements for at least the
Preceding three years.
Remark: Business status can be profitable, loss or new.
8.2 Credit history of the applicant/spouse (both from domestic and
Foreign banks if applicable)
Banks reference on the applicant credit history stating the following:
Name of the lending bank (if applicable)
Date borrowed,
For how many times?
Loan repayment performance

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Status of the debt
8.3 Confirmation letter on fulfillment of tax obligation (for exiting
Business)
8.4
Confirmation letter from the concerned body stating environment
Friendliness of the project as deemed necessary
9 SOCIAL INTERACTION OF THE APPLICANT
A recognition letter for his/her social relationship if any.
10 Management (Company General Manager and Project Manager)
Address
Educational background
Overall work experience
Relevant work experience
Attach CV with reference documents
11 SOURCE OF EQUITY
The applicant should clearly indicate the source of fund to be used as equity
contribution.
12 PROJECT FEASIBILITY STUDY
The project feasibility study should be prepared by licensed consulting firms
and the main content of the study should at least include:
12.1 Executive summary
12.2 Background Information
12.2.1 Brief history of the project and/or the promoter
12.2.2 Business objective of the project
12.2.3 Credit history and status of the promoter
12.2.4 Purpose and amount of loan requested
12.3 Market Study
12.3.1 General analysis of the market for entire industry
12.3.2 Competition
12.3.3 Demand analysis
12.3.4 Supply analysis
12.3.5 Demand-supply gap analysis

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12.3.6 Price analysis
12.3.7 Marketing strategy
12.4 Technical study
12.4.1 Location
12.4.2 Civil work design and construction
12.4.3 Theoretical capacity of machineries and capacity utilization

12.4.4 List and cost breakdown of machinery & equipment


12.4.5 Availability of utilities and infrastructure
12.4.6 Physical & natural conditions of the project (for agriculture
projects)
12.4.7 Materials for use/input (availability & cost)
12.4.8 Production process
12.4.9 Environment impact assessment
12.4.10 Project implementation schedule
12.5 Organization & management and man power requirement and availability
12.6 Projected financial study
12.6.1 Investment outlay
12.6.2 Production, revenue and operating costs estimate
12.6.3 Project financial results ( Profit and loss, cash flow and
balance sheet )
12.6.4 Viability and other measures of project worth
12.7 Socio economic aspects
12.8 Conclusion and recommendation
13 MARRIAGE CERTIFICATE/SOLE PROPRIETORSHIP/
13.1 Ethiopian Nationals
For married applicants: Marriage certificate
For single applicants: Written evidence of being single
For divorced applicants: Divorce certificate and evidence of being single
13.2 Expatriates
For married applicants: Marriage certificate, authenticated by the

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relevant countrys Ministry of Foreign Affairs.
14 PHYSICAL & NATURAL CONDITIONS OF THE PROJECT AREA
(FOR AGRICULTURAL PROJECT ONLY)
14.1 Climate: rainfall & temperature data
14.2 Water supply: availability & test for salinity
14.3 Soil test: suitability for the intended crops to be grown
15 CONTRACT AGREEMENT
15.1 Contract agreement and payment arrangements for construction
from a licensed contractor as deemed necessary (Before loan
contract signing)
16 VALUE ADDED TAX REGISTRATION CERTIFICATE (VAT)
(Before loan contract signing)
17 ADDITIONAL REQUIREMENTS FOR LEGAL ENTITIES/BUSINESS
ORGANIZATION
17.1 Memorandum of understanding
17.2 Article off Association
17.3 Authorization letter from parent company for intended borrowing if
the applicant is a subsidiary company
17.4 Profile of share holders that have more than 5% of the Prescribed
capital
17.5 Complete CV of the Board of Directors if any
17.6 Credit status of share holders with other banks which have more
than 5% of the prescribed capital
Ser. Name of shareholder Name of Type of Status of Remark
No. lending Bank loan the loan

1.
2.
3.
4.
Remarks: 1. Type of loan-Term loan, overdraft etc.
2. Status of loan Pass, Special mention, Substandard, doubtful or loss

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II. DOCUMENTS REQUIRED FROM APPLICANT DESIRING
TO EXPAND EXISTING PROJECT
1. All requirements listed from 1-17 except No.12
2. Renewed business license
3. Expansion license as appropriate
4. Capital increment if the registered capital is not sufficient
5. Audited financial statement of the project for a minimum of the
preceding three years if applicable
6. Detailed business plan which justifies the need for project
expansion
7. Confirmation letter on fulfillment of tax obligation
8. Signed statement stating that all statement represent true
financial status of the project
9. CV of exiting management staff
10. Payroll list of the existing employees with their respective salary.
11. Original commercial invoices for all purchased/existing investment
items excluding civil works.
12. A list of existing fixed assets and consumables /stock/ including
date of purchase and purchase prices.
13. Approved construction plan for the existing civil works and
approved construction plan and BOQ for expansion of civil works.
14. Review of Past Performance of the business (for at least three years)

Sr. Type of Produce Year 1 Year 2 Year 3


No. Quantity Value Quantity Value Quantity Value
1 Product I
2 Product II
3 Product III
4 Sales

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4.1. Local sales
4.2. Export sales

III. DOCUMENTS REQUIRED FROM APPLICANTS FOR


WORKING CAPITAL LOAN

1. Loan application
2. Project proposal which demonstrate that the cash flow of the project covers
the principal and interest repayment of the original loan including the
additional working capital request.
3. Confirmation letter on fulfillment of tax obligation
4. Audited financial statement of the project for a minimum of the preceding
three years (if applicable) including:
Cash Flow Statement
Income Statement
Balance Sheet Statement

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IV. DOCUMENTS REQUIRED FROM APPLICANTS FOR LOAN
BUYOUT PROJECTS

1. Loan application
2. Business plan
3. A copy of loan contract with the lending bank.
4. Audited financial statements of the project for the preceding three
operational years which should include:
Cash Flow Statement
Income Statement
Balance Sheet Statement
5. Confirmation letter on fulfillment of tax obligation.
6. Signed statement stating that no funds were diverted outside the project
and all statement represent true financial status of the project.
7. Signed statement confirming that all statements submitted represent
true financial status of the project.
8. CV of the existing management staff.
9. Payroll list of the existing employees with their respective salary.
10. Original commercial invoices for all purchased/existing investment items
excluding civil works.
11. A list of existing fixed assets and consumables (stock)including date of
purchase and purchase price.
12. Approved construction plan for the existing civil works of the project.
13. Title deed for the land holdings or if the land is obtained on lease base,
lease agreement and lease payment receipt.
14. Confirmation letter stating the project is environment friendly.
15. Detail tax payment records from concerned organ for at least three years.
16. Loan statement from the lending bank showing that the detail loan
disbursements and previous loan repayment performances.

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17. All legal documents such as investment certificate, principal registration
certificate and tax payer identification number.