Ethiopia Signs an Additional Financing Agreement with the World Bank to Support Women Entrepreneurs

Dec. 25, 2020

Addis Ababa, Ministry of Finance: The Government of the Federal Democratic Republic of Ethiopia and the World Bank signed a loan agreement of USD 100 million, which is approximately equivalent to ETB 3.8 Billion for the Women Entrepreneurship Development Project (WEDP) that will help to increase the earnings and employment of Micro and Small Enterprises (MSEs) owned or partly owned by female entrepreneurs.

 

The timely response, to reach those that have been highly impacted by the pandemic is critical in ensuring the financial sector has adequate liquidity to reach MSEs to reduce the loss of livelihoods and jobs, said H.E Yasmin Wohabrebbi, State Minister of Finance of Ethiopia during the project signing ceremony. The State Minister also explained the importance of developing tailored financial instruments, which allow MSEs to survive during challenging times saying “Women-owned businesses are disproportionately affecting by limited access to credit because they are less likely to present collateral guarantees to access credit”. The state Minister also emphasized Inclusive growth and economic empowerment of women and youth are at the center of Ethiopia’s development agenda.

The project will support the Government’s initiative to address liquidity constraints faced by enterprises that are otherwise viable and can sustain operations with adequate support. This in turn will enable MSEs, to retain and ultimately increase employment in the medium term. The project will also provide business trainings to female micro and small business-owners registered with the WEDP program. Furthermore, it will also provide technical assistance to implementing agencies such as TVET Colleges and City MSE Development Offices.

Mr. Ousmane Dione, Country Director of the World Bank to Ethiopia said the Bank has been working to open doors for female entrepreneurs in Ethiopia by providing the necessary finance, skills, services and support they need to grow their   business in order to grow their earnings and create jobs for Ethiopians.

The WEDP Additional Financing aims to secure the gains made by the previous phases of the project which have been rated highly satisfactory due to its innovative and effective model of reaching women entrepreneurs. The project, in the past, has helped Microfinance Institutions (MFIs) upscale to reach women entrepreneurs, who often fall in the category of underserved market segments. The project has enabled first-time borrowers to access loans through introducing innovative approaches such as data-driven credit scoring technologies, which can predict the ability of a borrower to repay a loan and in turn have significantly reduced collateral requirements.

H.E Yasmin Wohabrebbi, State Minister of Finance of Ethiopia, and Mr. Ousmane Dione, Country Director for Ethiopia, Sudan, South Sudan, and Eritrea, the World Bank, signed the agreements on behalf of the Ethiopian Government and the World Bank respectively.

 

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