Swedish International Development Agency (SIDA) and United States Agency for International Development (USAID) provided a new loan portfolio guarantee for women entrepreneurs via Enat Bank.
Even though the bank is young it has registered significant growth. It signed an agreement with the two development partners to guarantee up to USD 10 million for women investors who start medium sized businesses.
The agreement guarantees up to 50 percent of losses allowing the bank to offer more loans to women entrepreneurs and expanding its lending capacity to small and medium sized businesses.
After the signing ceremony held on September 29 at Golden Tulip Hotel Wondwossen Teshome, President of Enat Bank told Capital that the guarantee will benefit up to 500 businesswomen.
“Through our partnership we have effective risk sharing and this will help Enat Bank to overcome regulatory bottlenecks and make the most of mobilized local currency capital,” Annika Nordin Jayawardena, SIDA Deputy Head of Mission and Head of Bilateral Development Cooperation in Ethiopia, said during her speech.
According to different financial reports, access to finance is the most critical constraint that Ethiopian businesses face and women face even more of a challenge with this.
Enat Bank and the borrowers covered under the guarantee will also receive training in business skills and planning as well as market development, through the loan guarantee program.
In the just ended fiscal year, Enat bank earned 109 million birr in net profits, up from 71 million birr in the 2014/15 fiscal year.
The bank has 21 branches and six others in the pipeline, according to the President.
The paid up capital of the bank has surpassed 600 million birr, and the subscribed capital stands at 720 million birr.
Wondwossen said that the bank’s paid up capital is expected to reach half a billion birr, which is the minimum amount as per the regulation of National Bank of Ethiopia, by 2018.
Enat has over 11,500 shareholders and 65 percent of them are women, but the percentage of women who have been able to get loans from the bank amounts to only 24 percent.