Ethiopia: A micro-finance project run by ruling party engages in high interest loan disbursement  


ESAT News (January 4, 2016)

The Dedebit Credit and Saving Institution run by the ruling TPLF and financed by government banks and international development funds is providing high interest mortgage loans, in contravention to its stated objective of providing low interest loans to poor communities in Tigray.

A veteran and founder of the TPLF, Asegede Gebreselassie, wrote an article over the weekend exposing the illegal practices of Dedebit micro-credit institution in lending hundreds of thousands of dollars in mortgage loans at exorbitant interest rates.

Asegede Gebreselassie, who has parted ways with the Front objecting to the corrupt practices, say the Dedebit Credit and Saving Institution has long become an instrument of exploitation by the ruling clique against the people of Tigray.

He said the Institution has forced the people of Tigray into bankruptcy and poverty. Unable to pay the exorbitant debt, many small scale businesses went bankrupt while poor farmers have fled Tigray to avoid retribution from the credit institution. according to Gebreselassie.

Through its branches in 12 towns in Tigray, Dedebit has collected hundreds of thousands of dollars as a deposit promising to provide plots of land for the construction of houses. People were forced to take their savings from other banks and deposit at Dedebit in hopes acquiring land, emptying the coffers other banks and leaving them in deep crises, Gebreselassie said.

Ermias Legesse, news analyst with ESAT and author of two books that expose corruption in TPLF’s Ethiopia believes it was a long held strategy by the regime to strengthen Dedebit at the expense of private and government banks. “The regime wants Dedebit to become a major finance institution in Tigray. It is one of the major borrowers of the government and operates against all rules. It is part of augmenting crony capitalism by the regime.”

Dedebit Credit and Saving Institution began in 1997 with a capital of 2 million dollars has now a capital of 400 million dollars.