Dashen Bank Becomes First Private Bank in Ethiopia to Secure Trade Finance Guarantee from AfDB
Dashen Bank has made history by becoming the first private bank in Ethiopia to secure a Trade Finance Guarantee Facility Agreement worth USD 40 million from the African Development Bank (AfDB). The agreement was officially signed this morning at Dashen Bank’s headquarters, marking a major milestone for both the bank and Ethiopia’s financial sector.
The signing ceremony was attended by key representatives from Dashen Bank and AfDB. Asfaw Alemu, CEO of Dashen Bank, expressed pride in securing this facility, noting that it is the first of its kind to be extended to a private bank in Ethiopia. He emphasized that Dashen Bank is honored to serve as a bridge to bring this significant opportunity to life. Asfaw further highlighted that the agreement symbolizes strategic alignment that helps unlock Africa’s full potential. He attributed the successful securing of this facility to Dashen Bank’s rigorous due diligence, operational soundness, and progress in governance, underscoring the bank’s strong strategic direction.
Dr. Leandre Bassole, Deputy Director General of East Africa at the AfDB, expressed the agreement’s importance, calling it a pivotal milestone in strengthening the partnership between the AfDB and Ethiopia’s financial industry. Bassole noted that the agreement will play a significant role in advancing inclusive, private sector-led growth in Ethiopia, emphasizing that it marks the first direct trade finance guarantee facility the AfDB has provided in the country.
This facility will enable Dashen Bank to facilitate import and export trade finance requirements, thereby enhancing the bank’s capacity to support critical sectors of the Ethiopian economy. It is expected to significantly bolster trade finance by providing guarantees to confirming banks for non-payment risks arising from trade finance instruments such as letters of credit issued by Dashen Bank. This initiative responds to the challenges faced by Ethiopian banks, which have been constrained by inadequate credit lines from international confirming banks, limiting their ability to support clients effectively.
The facility is also expected to promote intra-Africa trade, aligning with the African Continental Free Trade Area (AfCFTA) agenda. It will help address the financing gaps in critical sectors and support the import of essential goods such as fertilizers, pharmaceuticals, solar energy panels, and agricultural machinery, all crucial for Ethiopia’s development.
