Dashen Bank and IFC Partner to Deliver Support to SMEs in Ethiopia
Dashen Bank today announced a partnership with International Finance Corporation (IFC) to increase access to finance for small- and medium-sized businesses (SMEs) in Ethiopia, supporting economic growth and job creation in the country.
Under the partnership, IFC will provide a risk-sharing facility that will enable Dashen Bank to increase its lending to SMEs, with a particular focus on those in the country’s important agribusiness sector and to businesses that are owned or led by women.
Increasing access to finance is critical for smaller businesses in Ethiopia, where IFC is working with partner banks and microfinance institutions to deliver the funding businesses need to grow, reach new markets, trade, purchase equipment, and create jobs.
Today’s announcement builds on IFC’s ongoing advisory work with Dashen Bank, which is focused on strengthening the bank’s SME business model, expanding its sales capacity and market coverage, and enhancing its credit underwriting and broader risk management capabilities to support sustainable growth.
Under the partnership announced today, IFC is committing $10 million in an unfunded risk-sharing facility to Dashen Bank, covering 50 percent of Dashen Bank’s credit risk on a targeted SME loan portfolio of up to $20 million equivalent. The IDA18 IFC-MIGA Private Sector Window (IDA PSW), a $2.5 billion World Bank initiative designed to catalyze investment by mitigating risks in certain markets, is providing a first-loss guarantee.
Asfaw Alemu , Chief Executive Officer at Dashen Bank, shared, “As Dashen Bank, we are excited to announce our partnership with IFC through the Small Loan Guarantee Program. This ground-breaking risk-sharing agreement represents a pivotal step in our dedication to supporting SMEs and agricultural businesses in Ethiopia. By providing access to much-needed credit facilities, we aim to foster economic growth, create jobs, and enhance financial inclusion across the nation,” Asfaw added.
Ethiopis Tafara, IFC Vice President for Africa, said, “Ethiopia’s small and medium businesses need reliable access to finance to grow and IFC’s partnership with Dashen Bank will deliver exactly that. IFC’s longstanding partnership with Dashen Bank is contributing to private sector growth, job creation, and development in Ethiopia.”
IFC has committed $605 million in fiscal year 2025 in Ethiopia across telecom, agribusiness and manufacturing. Key focus sectors, as aligned with IFC’s 2030 strategy, include agribusiness, infrastructure (renewable energy, telecom and logistics), manufacturing (pharmaceuticals and sectors supporting the construction industry), and housing.
