EIB Global, the financial arm of the European Investment Bank, has signed a €20 million financing facility with Dashen Bank to expand long-term credit access for Ethiopian small and medium-sized enterprises (SMEs).
The agreement prioritizes high-impact sectors, allocating at least 70% of the funds to agricultural value chains, including coffee, grains, fruits, and vegetables. Additionally, the portfolio mandates minimum 30% targets for climate action projects and 30% for women-owned or women-led businesses.
Dashen Bank CEO Asfaw Alemu emphasized that the facility aligns with the institution’s strategy to diversify funding channels for high-growth sectors. “This partnership with EIB Global allows us to provide patient, long-term capital to agricultural and export-oriented enterprises that serve as the backbone of our economy,” Alemu said.
EIB Global Director General Andrew McDowell noted that the facility aims to convert development finance into sustainable local enterprise growth. “By linking target funding to agriculture, climate resilience, and gender equity, this initiative will help Ethiopian businesses expand operations and access international markets,” McDowell stated.
The credit facility arrives at a crucial juncture for Ethiopia’s economy. Agriculture contributes over one-third of the nation’s gross domestic product and generates the bulk of its export earnings. However, agricultural SMEs frequently struggle to secure affordable, long-term financing due to strict collateral requirements, perceived seasonal risks, and broader structural liquidity constraints within the domestic banking sector.
While recent financial sector reforms—including the transition to a market-based exchange rate in July 2024—have helped ease foreign exchange bottlenecks and bolster export competitiveness, commercial banks continue to navigate tight liquidity conditions. Long-term international credit lines provide a critical buffer to sustain private sector investment.
This agreement marks another step in Dashen Bank’s expanded international partner strategy. In February 2026, the bank secured a $10 million risk-sharing agreement with the International Finance Corporation (IFC) to support a $20 million SME portfolio focused on agricultural and female-led enterprises.
For EIB Global, the transaction falls under its broader “Green African Agricultural Value Chains” framework. It follows a similar €20 million credit line extended to Zemen Bank in April 2026, which was matched locally to unlock €40 million in targeted agricultural and climate financing.
Specific interest rates, loan tenors, and application procedures for Ethiopian businesses will be released by Dashen Bank as the facility moves to the disbursement phase.
