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. The agreement prioritizes high-impact sectors, allocating at least 70% of the funds to agricultural value chains, including coffee, grains, fruits, and vegetables. This partnership aims to support the growth of Ethiopian businesses.
The financing facility also 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 initiative will help Ethiopian businesses expand operations and access international markets.
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 support the growth of Ethiopian businesses. The credit facility arrives at a crucial juncture for Ethiopia’s economy, with agriculture contributing over one-third of the nation’s gross domestic product.
Agricultural SMEs in Ethiopia 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. 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 in Ethiopia continue to navigate tight liquidity conditions, making long-term international credit lines a critical buffer to sustain private sector investment. This agreement marks another step in Dashen Bank’s expanded international partner strategy, following a $10 million risk-sharing agreement with the International Finance Corporation in February 2026.
The transaction falls under EIB Global’s broader “Green African Agricultural Value Chains” framework, following a similar €20 million credit line extended to Zemen Bank in April 2026. 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.
The partnership between EIB Global and Dashen Bank is expected to have a positive impact on Ethiopia’s economy, particularly in the agricultural sector. The facility will provide much-needed financing for SMEs, enabling them to grow and access new markets. Key aspects of the partnership include support for climate action projects and women-owned businesses.
Key points
- The EIB Global and Dashen Bank partnership will provide €20 million in financing for Ethiopian SMEs, prioritizing agricultural value chains and climate action projects.
- The facility aims to convert development finance into sustainable local enterprise growth, supporting the growth of Ethiopian businesses.
- The partnership aligns with Dashen Bank’s strategy to diversify funding channels for high-growth sectors, particularly in agriculture and export-oriented enterprises.
