Assessing factors influencing the effectiveness of lease finance projects: The case of Development Bank of Ethiopia

Abstract

The objective of this study is to identify and investigate factors that influence the effectiveness of lease finance projects at the Development Bank of Ethiopia (DBE). Building on previous research, seven key factors were identified that can affect project effectiveness, specifically within the context of investment and business projects. These factors include project specific factors, project planning-related factors, procurement and contract-related factors, project manager-related factors, project owners/clients-related factors, organizational related factors, and business environment-related factors. To achieve this objective, descriptive and explanatory research designs were employed. The research approach is quantitative, and survey based primary data is employed. The study primarily utilized self-administered questionnaires to gather information. A total of 112 out of 125 questionnaires were completed by DBE staff at the head office and four district offices in Addis Ababa. The collected data was analyzed using descriptive statistical techniques, specifically mean and standard deviations, and multiple linear regressions. The results of the regression analysis showed that the identified factors explained 87.2% of the variation in the effectiveness of project implementation in lease-financed projects at DBE, as indicated by the R² value. Furthermore, all factors examined in the study were found to be significant predictors of project implementation effectiveness. It was concluded that project-specific factors, such as project planning-related factors, procurement and contract-related factors, project manager-related factors, project owners/clients-related factors, organizational-related factors, and business environment-related factors significantly predict the effectiveness of project implementation in lease-financed projects at the Development Bank of Ethiopia. Based on these findings, the study recommends that DBE can enhance the effectiveness of lease financed projects by incorporating the identified factors into project implementation.