Dashen Bank has entered into a new partnership with the International Finance Corporation (IFC) to expand access to finance for small and medium-sized enterprises (SMEs) in Ethiopia, with a strong focus on agribusinesses and women-led enterprises.
Under the agreement, IFC will provide a $10 million unfunded risk-sharing facility, enabling Dashen Bank to extend up to $20 million equivalent in SME loans. The facility will cover 50 percent of the credit risk on a targeted SME loan portfolio, helping the bank scale up lending to underserved businesses.
The arrangement is further supported by the IDA18 IFC-MIGA Private Sector Window (IDA PSW)—a $2.5 billion World Bank initiative designed to mobilize private investment in challenging markets—through the provision of a first-loss guarantee.
Strengthening SME and Agribusiness Financing
The partnership is expected to particularly benefit businesses operating in Ethiopia’s agribusiness sector, a critical driver of employment and economic growth. Women-owned and women-led businesses are also a key priority under the program.
Access to finance remains a major constraint for SMEs in Ethiopia, limiting their ability to expand operations, enter new markets, invest in equipment, and create jobs. Through this risk-sharing mechanism, Dashen Bank aims to mitigate lending risks while increasing credit availability to high-potential but underserved segments.
Asfaw Alemu, Chief Executive Officer of Dashen Bank, described the agreement as a “ground-breaking” step in strengthening support for SMEs and agricultural businesses. He noted that the Small Loan Guarantee Program would help enhance financial inclusion and stimulate economic growth nationwide.
Building on an Ongoing Advisory Partnership
The new financing facility builds on IFC’s ongoing advisory support to Dashen Bank. IFC has been working closely with the bank to strengthen its SME business model, expand sales capacity and market reach, and improve credit underwriting and risk management systems.
Ethiopis Tafara, IFC Vice President for Africa, emphasized that reliable access to finance is essential for Ethiopia’s small and medium businesses to grow sustainably. He highlighted the longstanding partnership between IFC and Dashen Bank as a driver of private sector development and job creation in the country.
IFC’s Broader Engagement in Ethiopia
In fiscal year 2025, IFC committed $605 million in Ethiopia, spanning telecom, agribusiness, and manufacturing sectors. In line with its 2030 strategy, IFC’s priority sectors in the country include agribusiness, infrastructure (renewable energy, telecom, and logistics), manufacturing—particularly pharmaceuticals and construction-related industries—and housing.
The latest partnership signals continued efforts to mobilize private capital and strengthen Ethiopia’s SME ecosystem, positioning smaller businesses as a central pillar of inclusive economic growth.
