The International Finance Corporation (IFC) said on Monday it has issued a $10 million equivalent loan in Ethiopian birr to VisionFund Microfinance Institution, marking its first local currency loan to Ethiopia’s financial sector.
The financing is the first tranche of a planned $30 million equivalent commitment, with $20 million to come from IFC’s own account and $10 million from other investors. The loan is backed by the International Development Association’s (IDA) Private Sector Window, which helps provide affordable local currency funding in frontier markets.
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VisionFund, Ethiopia’s largest privately held deposit-taking microfinance institution, will use the financing to expand lending to micro, small, and medium-sized enterprises (MSMEs) across the country. At least half of the proceeds will be directed toward women-owned businesses.
“This partnership with IFC marks a historic milestone, not only for VisionFund but for Ethiopia’s financial sector at large,” said VisionFund CEO Taye Chimdessa. “With this investment, we are better positioned to empower entrepreneurs, strengthen rural economies, and bring inclusive financial services closer to families who need them most.”
IFC said it will also provide advisory support to help VisionFund strengthen its business planning, risk management, and responsible finance practices. The advisory package is expected to assist VisionFund in its planned transition into a microfinance bank.
“This landmark investment reflects IFC’s strong and growing commitment to fostering inclusive economic growth and promoting opportunities for entrepreneurs in Ethiopia,” said Ethiopis Tafara, IFC Vice President for Africa.
IFC, the World Bank Group’s private sector arm, committed $605 million in Ethiopia in the 2025 fiscal year across sectors including telecoms, agribusiness, and manufacturing. Its priority areas under its 2030 strategy include agribusiness, infrastructure such as renewable energy and logistics, pharmaceuticals, construction-related manufacturing, and housing.
