IFC partners with Dashen Bank for $20 million SME financing in Ethiopia

The International Finance Corporation (IFC), the private-sector arm of the World Bank Group, has deepened its footprint in Ethiopia’s private sector by partnering with Dashen Bank to provide $20 million in financing for small and medium-sized enterprises (SMEs). 

The initiative specifically targets agribusiness and women-led enterprises, two segments often constrained by limited access to capital. Under the agreement, IFC will provide a $10 million unfunded risk-sharing facility, covering 50 percent of the credit risk on a targeted SME loan portfolio. 

IFC Partners with Dashen Bank 

This is supported by a first-loss guarantee from the IDA18 IFC-MIGA Private Sector Window, a $2.5 billion World Bank initiative designed to mitigate investment risks in challenging markets and to empower SMEs towards accessing working capital, equipment financing, expand operations, and create jobs.

“We are particularly focused on women-led businesses and agribusiness, which are essential to Ethiopia’s economic growth.” Ethiopia’s SMEs face structural financing gaps, limiting their ability to scale operations and access markets. 

$20 million financing targets Ethiopian SMEs
By absorbing part of the downside risk, the facility enables Dashen Bank to lend more aggressively while maintaining prudent risk management. 

Agribusiness, a critical pillar of Ethiopia’s economy, stands to benefit significantly. Farmers, processors, and distributors will gain improved access to credit, facilitating trade, increasing productivity, and supporting sustainable economic growth. 

Women-led enterprises gain capital access
The initiative builds on IFC’s broader advisory support to Dashen Bank, including strengthening SME business models, enhancing underwriting capabilities, and expanding market coverage. 

According to Ethiopia’s private sector development agenda, improving financial inclusion is key to building resilience and stimulating entrepreneurship. 

Agribusiness boosts economic growth
Founded in 1995 by 11 shareholders, and named after Mount Dashen, the highest peak in Ethiopia. In fiscal year 2025, IFC invested $605 million across Ethiopia in telecoms, agribusiness, and manufacturing. 

With this latest initiative, IFC and Dashen Bank signal a shared commitment to creating an inclusive financial ecosystem capable of empowering entrepreneurs and women-led enterprises.