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Addis Ababa, July 17 (IANS): In a sign of Africa’s growing confidence in India’s investment potential to boost its growing economy, Ethiopia has sought that the Indian banking system engage with this East African nation’s financial sector despite its banking sector being off limits to foreign banks.
The Ethiopian government has requested the State Bank of India (SBI) to open a representative office and engage with the country’s financial sector.
“But nowadays, the demand for loan is higher than available loanable funds,” he said.
“That is why the presence of SBI presence is very crucial here in Ethiopia for availing investment funds for Indian companies as well as other companies.”
According to him, the purpose of the representative office is to help assist private investors with feasible project ideas by appraising their projects.
This, the minister said, would provide an opportunity for more Indian companies to invest in Ethiopia, and also help identify creditworthy loanable and profitable projects.
“There is a mismatch between the demand for loan and the supply for loan and that is why we insist to have their presence here,” he further stated.
The public sector SBI is India’s largest bank. It and its five subsidiaries control almost 23 percent of the subcontinent’s banking sector.
Apart from routine banking, SBI also provides investment banking, general and life insurance, mutual funds and other services like pension funds.
Apart from a number of other public sector and private banks, India is also open to other foreign banks like Standard Chartered, Citi Bank and HSBC.
“India is a developing country but the banking sector has done a tremendous job in the development of the country by providing various financial services to the public”, Subramanian Venkataraman, country head and CEO of SBI, said.
“Ethiopia’s economy is predominantly agriculture-based and India is also per se the same but the banks in India have done a tremendous job in promoting agriculture and modernising agricultural activity by providing soft loans to agriculturalists.”