The National Bank of Ethiopia (NBE) and the International Finance Corporation (IFC) have signed a Framework for Cooperation to establish Ethiopia’s first dedicated Mortgage Refinance Company, Prime Minister Abiy Ahmed announced.

The planned wholesale financial institution will be capitalized at 100 billion birr, with the IFC expected to contribute a minimum of $200 million, according to the Prime Minister.

The mortgage refinance company is expected to address long-standing liquidity mismatches in Ethiopia’s banking sector by providing longer-term funding to financial institutions, potentially expanding access to mortgage financing for households across the country.

Prime Minister Abiy said the initiative forms part of the government’s broader objective of delivering 1.5 million affordable and dignified homes for Ethiopian families. He also said the partnership would help expand private-sector participation in the country’s financial system.

The agreement marks another step in Ethiopia’s efforts to develop its financial sector and expand access to long-term housing finance.