Last week saw thousands of young individuals queueing at three branches of the Development Bank of Ethiopia (DBE) in the capital to register for the fourth round of a five-day "business training". Many were lured by the hope of gaining sizeable loans without collateral, contingent upon undertaking the training and coming up with a plausible business proposal.

The thirst in the young entrepreneurial community to kick start their business careers was evident as turns in the queue were sold for money as high as 1,000 Br.

On a mid-day one of the weekdays, Roman Mohammed joined the ambitious people waiting in a long line at the Kazanchis branch of the Bank. He had been waiting to register for nearly five hours, taking a leave of absence from work where he earns a 5,000 Br gross salary. Completely in the dark about the program, Roman believes he is getting an interest-free loan, which serves its best interest. Hearing his colleagues fussing about the opportunity to start a business, he came to take the training without giving much thought to what he planned to do.

"I'll figure it out after the training," he said.

The registration method demanding applicants' presence raised questions by many, witnessing the long chaotic queue. For Yeabsira Nigussie, a spokesperson for the Bank, the absence of electronic registration is designed to measure the degree of commitment. He believes millions would register online without an actual interest in engaging in the training otherwise.

Following the gathering of a large "committed" crowd for registration, the Bank has extended the deadline for another four days.

Meanwhile, informed applicants, such as Yahya Abdusemed, are returning home, leaving the scene frustrated by the long line. The young man in his mid-20s is ambitious about joining the agricultural sector. His older brother had already taken the training before this and adequately briefed him on what to expect. After learning about the fourth training from the Bank's social media platform, he decided to try his chances. He plans to return and see if the situation improves in the last few days.

According to Yeabsira, close to 300,000 people have registered in the four rounds. He said the five-day training would help applicants develop the necessary skill to create business plans and submit qualified proposals.

Lease financing issued by DBE will entail the purchase and renting of capital goods (machinery) at a yearly service charge of nine percent. The financing modality is open for new and running businesses within the priority sectors such as agriculture, agro-processing, tour operation, mining and construction.

The projects need a capital range between half a million Birr and 7.5 million Br while contributions by the Bank will not exceed more than 80pc of the total equity as the recipient will need to cover running costs such as salaries. Grace periods for payments of service fees will not exceed six months.

This differs from the modality mentioned by the Bank President, Yohannes Ayalew (PhD), a month ago to a maximum of 1,000 businesses. At a panel discussion held at the Science Museum, he revealed to an audience of prospective entrepreneurs that the bank had prepared about 80 million dollars for "idea financing". He also said a televised national process of ideas being pitched to a panel of judges would ultimately provide seed money.

The support for startup business ideas is better late than never, as a new report by Sub Stack indicates that Ethiopia mobilised one billion dollars less than its neighbour Kenya funding startups in the past year.

The report, which compiled data on startup financing in Eastern Africa, demonstrates that Ethiopia managed to facilitate a mere six million dollars which translates to 0.5pc of the total fund for the region, while Kenya issued a staggering 1.16 billion dollars. Tanzania, Uganda and Sudan have managed to flow more funds to startups.

The Assistant Professor of Finance at Addis Abeba University, Sewale Abate (PhD), predicts startups will fall short of funding until the capital market becomes operational. He argues since the banks have a five percent nonperforming loan threshold, they cannot afford to give high-risk loans with long payback periods.

"Commercial banks have zero appetites for risk," he told Fortune. He said they would risk seizure by the central bank if they engaged in high-risk speculation with the deposit of customers.

According to the expert, the only policy bank in the country expecting to address the national demand for seed funding is not pragmatic. He said Venture Capital, Angel Investors, Hedge Funds, and Mutual Funds are the types of financial institutions that can afford to give out high-risk loans to startups and can exist only in an operational capital market.