British International Investment (BII) and FMO, the Dutch entrepreneurial development bank, have jointly committed up to USD 20 million each to Dashen Bank of Ethiopia. The loan aims to support the country’s agricultural sector, which employs 80 Pct of the population, contributes 39 Pct to the GDP, and generates 90 Pct of its foreign currency from exports. The funding will enable Dashen Bank to provide USD-denominated loans, helping farmers increase productivity in areas such as harvesting, logistics, and processing while boosting export earnings. The financial support will also benefit other agricultural enterprises, including cut flower and coffee producers, promoting innovation, business growth, improved quality and safety standards, and value addition.
This collaboration marks the first foreign investment in Ethiopia’s financial services sector under the new intermediation directive for banks issued by the National Bank of Ethiopia in 2021. By providing long-term funding, BII and FMO aim to catalyze the market, build investor confidence, and mobilize more private capital. The partnership will also support Dashen Bank in enhancing governance, risk management, environmental and social practices, as well as gender equality standards.
Asfaw Alemu, CEO of Dashen Bank, expressed his satisfaction with achieving this milestone and highlighted the significance of the funding for supporting export-oriented agribusinesses in Ethiopia.
Marnix Monsfort, Director of Financial Institutions at FMO, underlined the importance of attracting foreign direct investments and USD funding to create jobs and foster financial inclusion in rural communities.
This investment not only addresses the need for foreign exchange and capital in Ethiopia but also showcases international confidence in the country’s agricultural potential. It sets the stage for future investments, promoting sustainable financing practices and contributing to Ethiopia’s economic growth and development.