EIB Global, Dashen Bank Unlock €40M for Ethiopia’s Farms and Small Businesses

Businesses will receive financing on better terms than those generally available in Ethiopia’s domestic commercial market, including longer repayment periods.

EIB Global, the European Investment Bank Group's international development arm, and Ethiopia's Dashen Bank are making €40 million available to small and medium-sized enterprises (SMEs). The partnership focuses on agriculture, environmental protection and women's empowerment, giving businesses access to funding for investment and expansion. EIB Global will provide a €20 million loan, with Dashen Bank matching that contribution and distributing the combined financing to eligible Ethiopian companies.

Businesses will receive financing on better terms than those generally available in Ethiopia's domestic commercial market, including longer repayment periods. Limited access to finance remains a major obstacle for private businesses, particularly agricultural enterprises seeking to modernise production, improve efficiency and meet international market requirements. The funding will also help companies strengthen their resilience to droughts, floods and other climate pressures affecting a sector central to Ethiopia's economy, employment and export earnings.

At least 70% of the financing will support agriculture and related activities, with priority given to exporters serving Europe and other markets in coffee, pulses, horticultural products and cereals. At least 30% will support climate action and environmental sustainability, with a further 30% targeting women's empowerment. EIB Global financing is projected to support more than 34,000 full-time jobs across beneficiary businesses, connecting improved access to capital with employment and business growth.

Longer-term funding supports farms, exporters and women-led businesses

EIB Vice-President Ambroise Fayolle said the partnership would help agricultural businesses invest, adapt to climate change and reach new markets, strengthening resilient agricultural value chains and supporting quality employment. Dashen Bank Chief Executive Officer Asfaw Alemu said the agreement would expand longer-term financing for agricultural enterprises, exporters and other eligible businesses, alongside greater support for green investment and women-led companies. He also linked the partnership to the bank's ambition to bring international capital, expertise and innovative financial solutions to its customers.

Technical support strengthens green lending

EIB Global will complement the loan with technical assistance covering project identification and development, environmental and social due diligence, climate-finance capabilities, monitoring and reporting. The European Union is funding this assistance through the ACP Trust Fund's EC Compartment, helping Dashen Bank develop its capacity to assess and support eligible investments. Dashen Bank also participates in the EIB's Greening Financial Systems programme, which helps Ethiopian financial institutions identify and manage climate risks and expand green lending.

Banking reforms create room for development partnerships

The agreement comes as Ethiopia modernises its financial system through a new central bank framework, updated banking legislation, stronger governance and supervision, and a gradual opening to foreign investment. Private banks are expanding branch networks, digital services and SME products and building relationships with development financiers, with Dashen Bank among the country's largest private commercial lenders through more than 900 branches offering microenterprise, corporate, digital and interest-free banking services. The partnership reflects this expansion in banking services and international cooperation, bringing development funding into the domestic market to support business investment.

The initiative supports the EU's Global Gateway priorities for resilient agrifood systems, sustainable growth, biodiversity and climate adaptation. It also advances joint EU-Ethiopia efforts to develop climate-resilient, nutrition-sensitive agricultural value chains and improve access to finance for microenterprises and SMEs. European Commissioner for International Partnerships Jozef Síkela said Team Europe's support would help Ethiopian entrepreneurs grow and innovate, creating local jobs, strengthening environmental protection and making local value chains more resilient.