News Column

New Capital Goods Venture Brings Heyday to Man'g Enterprises

June 17, 2014

Addiszemen Seyoum

The beneficiaries will receive machinery through a range of financing options without the requirement for collaterals

Addis Capital Goods Finance SC, established with a capital of 955 million Br, launched its services on Tuesday, June 10, 2014. They are providing machinery to Addis Abeba based medium manufacturing enterprises on a lease and loan purchase basis, without the need for collaterals.

The Company, whose managing director is Elias Ensie, was established under proclamation No 807/2005, with a financial contribution of 455 million Br from eight state entities, including Anbessa City Bus, Addis Ababa Abattoirs Enterprise, Addis Abeba Exhibition & Market Development Centre, Addis Saving and Credit SC, theatres and cinemas, as well as the Addis Abeba City Administration. They have also received a long term loan of 500 million Br from the Commercial Bank of Ethiopia (CBE).

The Company will support small & micro enterprises (SMEs) involved in wood and metal works, textiles and agro-processing with limited or no machinery supply, said Tilahun Worku, SME Development Bureau at the Addis Abeba Administration. It will be a non-profit venture, with the profits fully recycled for use in the same purpose, said Getachew Mekuria, planning & market promotion director of the Company.

Priority beneficiaries include enterprises established by university graduates, TVET graduates, women and groups of people with disabilities. The Company will mainly work with enterprises that have been graduated from SMEs to medium enterprises in three rounds so far, according to Getachew.

There are 617 of these enterprises, he said, and so far 200 have submitted their business plans to the company. While not all could qualify for the financing, the company will continue meeting the target groups in person and collecting business plans, according to Getachew.

The machinery to be procured, mainly from domestic makers but also from abroad, will cover the needs of enterprises in the manufacturing sector, in wood work, agro-processing and leather and shoe making. Procurement proposals are likely to be submitted to the company's managing director and then board within a month or two, Getachew said. The beneficiaries will get access to the machinery through financial leasing, which is paying for the price of the machinery over a certain period of time, only owning the machinery when payment is concluded or through hire purchase - where the enterprises will own the machinery to the degree they have paid.

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Source: AllAfrica

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