Banks offer loan when they are adequately convinced that the fund is going to be invested in a business or commodity that adds value to the society. Thus, when you apply for a bank loan its always better to present a convincing proposal on how you plan to spend the fund.
Clients should present credible documents to indicate their capacity to repay back their loans. For businesses this might mean that the borrowing companys financial health should indicate its ability to generate sufficient cash flows to service the debt. This might include presenting audited financial statements of their existing businesses, present a proof of their personal income (tax, dividends, or others) and good record of previous loans repayment.
Currently Ethiopian banks require a collateral to secure risks associated with borrowers. In this case, collaterals should be legal. But not only the collateral an entitys or individuals credibility in terms of paying tax, previous loan repayment history, and other dimensions are generally assessed