2025/07/31 by Mandefro Diriba
paper · doi:10.20372/nadre:15135
Misganu Getahun (PhD) The World Bank defined project as the building block of development. Therefore, Projects play a vital role in the implementation of national policies and strategies. Development Bank of Ethiopia is one of the government owned financial institution engaged in financing viable projects from the priority areas of the government i.e. manufacturing, mining and commercial agriculture projects etc. The information obtained from DBE shows that, most of agriculture development projects financed by the bank, especially projects under the custody of Nekemte District are sick/failing. Projects can fail because of copious reasons. Therefore, analysis of project failure factors can give opportunity to know the problems and improve the decision making process. Thus, the aim of this study is to identify and classify determinant of failure for DBE Nekemte District financed agricultural development projects. A questionnaire survey was used to collect data from 127 respondents. The targeted respondents were the owners/managers of projects and credit performers of DBE Nekemte District and two main branches namely (Nekemte and Asossa). In addition, a semi structured interview survey was conducted to seek information from key informants of bank side and bank client (project owners/managers) side. Factor analysis, correlation analyses and Regression analysis were among the used tools for Data analysis. The findings of the study reveal that, five components were extracted from the 26 items used in factor analysis. Project management deficiencies, was rated as the most severe failure factor for the projects, while Bank credit management system related constraints and Macroeconomic factors follow closely in second and third place respectively. The researcher recommendations include, the project owners/promoters have to have interest/commitment to support success of their projects; the project promoters/owners should apply formal practices of project management; the project owners should organize marketing unit and hire marketing professionals for their projects; DBE should give continuous advise to the projects by assigning well trained and experienced marketing professionals; credit policy and procedures of the Bank have to be consistent in all aspects and revised accordingly. In addition, more research should be conducted to explore the interrelationships between the five components of project failure developed during this study. Keywords: Commercial agriculture, Project failure, Project financing,