The European Investment Bank’s international development arm, EIB Global, is committing €110 million to help farmers in Ethiopia improve productivity, expand their businesses and cope with climate change. The Development Bank of Ethiopia (DBE)will channel the EIB Global credit line to local institutions that lend to agricultural enterprises in rural areas, with 50% earmarked for women and 20% targeting climate adaptation.
The operation supports the third phase of Ethiopia’s “Rural Financial Intermediation Programme”, or RUFIP III, a flagship Ethiopian government initiative to strengthen the agricultural sector’s access to finance, competitiveness and resilience. Funds will be managed by the Development Bank of Ethiopia and on-lent to Rural Financial Institutions, including microfinance institutions and Rural Savings and Credit Cooperatives (RUSACCOs).
The final beneficiaries of this financing will mainly be smallholder farmers and MSMEs, with an emphasis on women and youth. Women make up more than half of Ethiopia’s agricultural workforce and have unequal access to finance. Closing this gap advances European Union goals to enhance rural financial inclusion worldwide.
The operation is also expected to contribute to climate action and environmental sustainability by 20%, particularly in supporting resilience of rural communities to droughts, floods or pests and thus contributing to adaptation goals aimed at appropriate environmental risk management procedures.
