Ethiopia launches $270 mln SMEs Finance Project

Addis Ababa, December 28, 2017 (FBC) – Ethiopia today launched Small and Medium Enterprises (SMEs) Finance Project with 270 million US dollars.

A study by the World Bank found that the private sector is expected to play a key role in Ethiopia’s journey to become a middle income country in the next decade.

However, Ethiopian firms face significant financial constraints, because financial institutions do not accommodate their needs.

The project launched today aims to increase access to finance for eligible small and medium enterprises, according to Asfaw Abebe, director general of the Federal Small and Medium Enterprise Manufacturing Industries Development Agency.

About 2,152 enterprises would benefit from project that would run for a period of five-years, Asfaw said.

The project comprises, among others, establishing a credit facility for working capital and leasing finance for participating financial institutions as well as leasing finance for eligible SMEs.

The Development Bank of Ethiopia (DBE) will provide both direct financing to SMEs and wholesale finance to other financial intermediaries for on-lending to SMEs.

According to Asfaw, SMEs engaged in construction, agro-processing, construction and tourism are eligible for the project that would be carried out by the stated amount of funds obtained from the International Development Association (IDA) and European Investment Bank (EIB).