The larger cities in the three provinces of Shewa (excluding Addis Ababa), Harrar and Eritrea accounted for nearly 36 percent of industrial loans in number and absorbed over 50 percent of the total value of industrial loans.

The bank's policy of requiring collateral valued at 200 percent or more of the amount of the loan requested had adverse effects.

A Board of Management (BOM) consisting of seven senior government officials administers the bank.

The two top bodies (Public Enterprises for Financial Agency (PEFA) and BOM are, among others, responsible for issuing major policies of the bank, approval of its strategic and operational plans as well as the close and regular monitoring of the bank's operations.

The bank's BOM has established separate Compliance and Risk Management and Internal Audit Directorates for the implementation of policies and procedures.

Also, there is a need to develop an engineering staff or consultant arrangements to assist in and review cost estimates and determine the suitability of the technical process selected.

Furthermore, supervised agricultural credit should be developed to see that loans are properly utilized and repayment made on time.