Development Bank of

Ethiopia

Checklist to access DBE’s

Loan
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Checklists to access DBE Loan

1. LOAN APPLICATION
2. LICENSE
• Temporary/permanent work permit/ for foreign investors.

• Investment certificate

• Principal Registration Certificate/Commercial Registration

• 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

April 2022 3

Checklists cont’d
• 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
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Checklists cont’d
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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Checklists cont’d
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)
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Checklists cont’d

6.UTILITIES
• Written confirmation for the availability of electric power and Water with indicative cost from the responsible
authorities as deemed necessary
7.POWER OF ATTORNEY
• A Power of Attorney for loan applications submitted through an agent or any other third party.
8.TRACK RECORDS
• 8.1.Business track records with details if the applicant has other businesses

• 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.

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Checklists cont’d

8.2. Credit history of the applicant/spouse (both from

domestic and foreign banks if applicable)
8.3. Confirmation letter on fulfillment of tax obligation.
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.
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Checklists cont’d
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. (Equity Declaration
Form Should be filled and submitted)
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Checklists cont’d
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
12.1.1.Brief history of the project and/or the promoter
12.1.2.Business objective of the project
12.1.3.Credit history and status of the promoter
12.1.4.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
12.3.6.Price analysis
12.3.7.Marketing strategy
Checklists cont’d
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
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Checklists cont’d
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
relevant country’s 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
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Checklists cont’d
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)
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Checklists cont’d
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
17.5. Credit status of share holders with other banks which
have more than 5% of the prescribed capital
Why our Bank request the above documents
1. Name and Address of the Promoter and the Project
 Exact location of the promoters’ office and project location,

 telephone number of office and cell phone,

 postal address,

 fax number, and

 e-mail address.
 Ensuring of these addresses exactly reduce fraudulent customers by some
number since such persons are not willing to disclose their real address and
location.
 Besides it’s important for due diligence, knowing the address of the promoter
as well as the project is equally important for monitoring project progress
and follow-up.
 Why our Bank request cont’d…

2. Legal Status of the Promoter (Person or Company) 

Legal status includes
 the legal form of the company (Sole proprietorship, company,

NGO, etc.),
 date of establishment,

 article and memorandum of association for companies,

 marital status (for Sole proprietorship),

 Investment license,

 Trade license & status of the project (whether it is new or existing).

 Why our Bank request cont’d…

Legal Status of the Promoter cont’d…

 The need to know the form of the business

• To determine whether the applicant is in the financing categories of the Bank or

not from the perspective of legal formation of business.

• To request legally relevant documents for the form of organization.

• To decide the type and the strength of due diligence executed.

 The importance of establishment date is seen from the following angles

 To see all the legal documents are renewed as the government regulation.

 To identify the rules and regulation that concerns them or not, and to confirm whether the

business is established as per rules and regulation of the country.

 Why our Bank request cont’d…
Legal Status of the Promoter cont’d…
 The need for Article & Memorandum of Association:

 It helps to know the members of the company.

 It helps to know the business sectors in which the company is engaged.

 It helps to know the establishment objective of the company.

 It helps to know the power, responsibilities and duties of the general

manager/CEO.
 It shows the amount and number of shares that each share holder has in the

company.
 To confirm the capacity of the company capital to cover the equity contribution.

 To know the organizational structure of the company,

 To know the liability of members.

 Why our Bank request cont’d…

The Importance of Knowing Marital Status (Sole proprietorship)

 To protect the Bank from lawsuit by other spouse on common property.

 To avoid seizer of the project due to dispute of the couples.

 To attract the family attention to project success or to create belongingness

of the project among family members.

The Importance of Investment License

 To confirm foreign investors are permitted to invest in the country and to

know its validity.

 To accept the tax free pro-forma invoice of the applicant in feasibility study.

• To proceed on the new loan applicants request considering the investment

license as trade license.

 Why our Bank request cont’d…
Legal Status of the Promoter cont’d…
Importance of Trade License

 To know in which business the applicant is engaged

 To confirm the business is legally perform its activity

 To know the capital of the applicant and to cross check with equity

contribution

 The Importance of Principal Registration License

 To know the operating area of the project

 It helps to register the business

 To check whether the company/ individual is registered to be engaged in

business
Why our Bank request cont’d…

Legal Status of the Promoter cont’d…

The Need for Title Dead and Site Plan of the Land holding

 To confirm the ownership of the land holding.

 To define the exact location of the project.

 To know the size of land holding.

 To register the collateral as pledge.

 The need for Construction permit and Authenticated Plan

 To avoid risk from an illegal construction.

 To be safe from losing compensation during the government needs the area

for other purpose.

 Why our Bank request cont’d…

Legal Status of the Promoter cont’d…

The Need for Title Dead of the Vehicle

 To confirm the ownership

 To register the vehicle

 Status of the Project (Existing or New)

 To identify whether the business firm carried out its legal commitment, such as tax

and other obligations.

 To check the past performance of the business and to determine whether to finance

the project or not.

 To decide how to accommodate the application of the promoter (as new or expansion)

and apply thereby to process the loan application as per the credit policy of the Bank.
 Due diligence cont’d…

3. Track Recording of the Share Holder

 This part identifies the members of the given company are really

existing individuals or legal persons

 To check source of equity

 To know the Address of the share holders

 To evaluate their personal business performance if they have any

 To check the back history, it might be the bankrupted individual can

approach the Bank with the mask of company and may create the
same problem
 Why our Bank request cont’d…

4. Organization and Management Evaluation

 The competency & characteristic of the management team and

 The man power requirement of the business.

 Why our Bank request cont’d…
Organizational Structure:
 In consideration to the form of business (Sole proprietorship, PLC, S.C,
etc.), and
 the size and type of the business,
 it is important to discuss the appropriateness of the organization
structure in place.
Competency & Characteristic of the Management Team:
 Educational background,
 Experience,
 Qualification of each management team member to the business has to
be discussed and appropriate recommendation should be forwarded if
there is any gap
 Why our Bank request cont’d…

Availability of Manpower:

 The existence of both skilled and unskilled labor as per the

requirement of the business also has to be checked.

 The wage rate and salary scale of the project proposal are also

evaluated as per the prevailing market situation

 Why our Bank request cont’d…

5. Credit Relation Checking

 Credit history of both the business and its owners.

 Identification of the credit performance of the business and its owner

protects the Bank from being accessed by defaulters or non-credit

worthy clients.
 Why our Bank request cont’d…

6. Financial Requirement of Investment

 Identify and evaluate the relevance of each investment items for the

intended project
 whether the value of each investment item is supported with one

genuine and updated pro-forma invoices from known suppliers or other

technical documents like bill of quantity or purchase documents,
 Why our Bank request cont’d…
7. Technical Aspects
Engineering documents and their importance:
 Civil Documents

 Blue Print (Architectural, Structural, Electrical, Sanitary, soil test,

structural analysis for beg projects)

helps to know
 the size, shape and design of the construction, and

 to determine material requirement of the construction.

 It is important to review construction units in line with the project nature.

 Why our Bank request cont’d…

Engineering documents and their importance cont’d

 Take off sheet

 reduces the time taken to calculate the material requirement of the

construction and over looking of some construction parts when trying to

calculate from blue print.

 Bill of quantity

 tells the cost of building by giving additional price information.

 Why our Bank request cont’d…

Machinery and Equipment:

 All pro-forma invoices should have the same specification and detail

information about
 payment arrangement,

 value date,

 delivery arrangement(CIF, FOB),

 turnkey agreement if any, capacity etc.

 Every Procurements above $ 1,000,000 requires international bid conducted

documents.
 Indicating the selected machinery and the criteria for selection (capacity,

price, technology etc.)

 Why our Bank request cont’d…

Other Sensitive Issues

 Conflict of interest- should be checked

 Conflict of interest- the relation of the supplier and the loanee

should be identified to avoid the over invoicing of the pro-forma

to minimize their equity contribution and from using the project as
market may be low quality product of their business.
Thank you!