London, 30 August 2023 (TDI): In a transformative move to bolster Ethiopia’s financial sector and foster agricultural growth, British International Investment (BII) and FMO, the Dutch entrepreneurial development bank, announced on 29 August a groundbreaking commitment of $40 million to Dashen Bank.
This partnership aims to reshape Ethiopia’s agriculture by providing essential capital and resources for expansion, innovation, and increased productivity.
Ethiopia’s agricultural sector employs 80% of the population and contributes 39% to GDP, a significant benefit. BII and FMO’s commitment will empower Dashen Bank to offer longer-term USD capital to agricultural exporters.
This capital infusion will enable exporters to acquire cutting-edge machinery, automate processes, expand production, and improve food availability.
The funding initiative aims to enhance the earning potential of Ethiopia’s agricultural exporters and promote productivity.
Additionally, it enables Dashen Bank to provide USD-denominated loans for machinery imports and efficient processing of agricultural businesses.
This partnership aligns with Ethiopia’s goal of greater financial inclusivity, as currently only 45% of its population has access to bank accounts.
Moreover, this collaboration marks a milestone as the first foreign financial institution to provide long-term funding to Ethiopia’s financial services sector under the new intermediation directive issued by the National Bank of Ethiopia in 2021.
It drives market growth and investor confidence while attracting more private capital for private-sector development.
Lastly, this partnership aims to elevate Dashen’s practices in governance, risk management, environment, and social matters. Also, it aims to bring gender inclusion to the highest national standards.
Read Also: Ethiopian State Minister Called on UK’s Special Envoy for Famine Prevention.
Executive voices
The executives expressed their enthusiasm for the initiatives, with Asfaw Alemu, CEO of Dashen Bank, stating, “A historic milestone for export-oriented agribusinesses.”
Stephen Priestley, Managing Director and Head of Financial Services at BII added that the partnership opens doors to untapped opportunities.
Marnix Monsfort, Director of the Financial Institutions Department at FMO, highlighted the impact on rural communities. He emphasised its job creation and financial inclusion aspect.
British Ambassador to Ethiopia, Darren Welch, hailed BII and FMO’s investment as a crucial milestone for Ethiopia’s financial sector and UK-Ethiopia relations.
This pioneering international investment supports Ethiopia’s economic reforms and benefits local businesses by enhancing financial accessibility for productivity and exports.
