Dashen Bank and EIB Global Set €40M SME Finance Deal

In Short

Dashen Bank and EIB Global are making €40 million available to small and medium-sized enterprises in Ethiopia.

EIB Global will provide €20 million in long-term financing, and Dashen Bank will match it with another €20 million.

At least 70% of the package is set for agriculture and related activities, with minimum shares for climate action and women’s empowerment.

What Happened: How EIB Global And Dashen Bank Will Lend To SMEs

Dashen Bank will channel the combined financing to Ethiopian SMEs. The European Investment Bank Group said the loans will be offered on better terms than the domestic commercial market, including longer maturities, which means businesses have more time to repay.

At least 70% of the financing will go to the agricultural sector, including coffee, pulses, horticultural products and cereals. The EIB said priority beneficiaries will include SMEs exporting to Europe and elsewhere.

The initiative also sets targets for how the money is used. At least 30% of the financing is meant to support climate action and environmental sustainability. Another 30% is earmarked for women’s economic empowerment.

EIB Vice-President Ambroise Fayolle said: “This partnership turns long-term finance into tangible opportunities for Ethiopian businesses.” He added that EIB Global will support agribusinesses to invest, adapt to climate change, grow and reach new markets.

Dashen Bank Chief Executive Officer Asfaw Alemu said the partnership will help the bank offer longer-term financing to agricultural enterprises, exporters and other eligible businesses, while strengthening support for green investment and women-led companies.

Why It Matters: Longer-Term Capital And Added Support For Dashen Bank

The EIB said the financing is projected to support a total of over 34,000 full-time jobs through beneficiary businesses.

EIB Global will also provide technical assistance to strengthen Dashen Bank’s environmental and social due diligence, climate-finance capabilities, and monitoring and reporting. Due diligence is the checks a lender does to understand risk before financing a project.

The technical assistance is funded by the EU under the ACP Trust Fund, EC Compartment. Dashen Bank is also enrolled in the EIB’s Greening Financial Systems programme, which supports Ethiopian financial institutions in identifying and managing climate risks and expanding green lending.