The agreement works through a risk-sharing facility: IFC will cover half of Dashen Bank’s potential losses on a targeted SME loan portfolio.
The first-loss support comes from the IDA18 IFC-MIGA Private Sector Window, which helps attract private investment into more challenging markets.
This setup gives small businesses a better chance of getting the loans they need to grow, buy equipment, hire workers, and expand into new markets.
Dashen Bank’s CEO, Asfaw Alemus, said the deal is an important step for Ethiopia’s business community.
He explained that many SMEs struggle to get credit, and this program will help the bank lend more while managing its risk. He added that the partnership will support entrepreneurship, job creation, and financial inclusion across the country.
IFC Vice President for Africa, Ethiopis Tafara, said the goal is to build a financial system that gives more people, especially women and those working in agriculture, real access to capital.
He stressed that small businesses are central to Ethiopia’s growth story, and improving access to finance is key to unlocking their potential.
This new facility comes as IFC continues to expand its work in Ethiopia. In fiscal year 2025, IFC committed $605 million in the country, focusing on telecoms, agribusiness, manufacturing, and infrastructure such as renewable energy and logistics.
These priority sectors align with IFC’s 2030 strategy, which aims to strengthen job creation, private investment, and sustainable development across the region.
By backing Dashen Bank with guarantees rather than direct loans, IFC is helping move more commercial capital into Ethiopia’s economy. It’s a strategy aimed at making a big impact: giving thousands of small businesses a better chance to survive, grow, and create jobs.
