Chief Executive Officer at Dashen Bank Asfaw Alemu

Dashen Secures $40mln Loan from Foreign FIs to Support Local Agribusinesses

ADDIS ABABA – FMO, the Dutch entrepreneurial development bank, and British International Investment (BII) have jointly given a 40 million US Dollar loan to Dashen Bank – one of Ethiopia’s largest private sector banks.

The loan will help to drive agricultural exports and provide access to much-needed foreign exchange (FX) within Ethiopia.

Agriculture contributes 39 percent to Ethiopia’s GDP and generates 90 percent of its foreign currency from exports.

The development finance-backed facility enables Dashen with over five million customers to provide USD-denominated loans to cover the costs of importing machinery.

“By providing much needed foreign currency for on-lending to the bank’s agriculture/exporting clients, FMO aims to contribute to job creation and financial inclusion of rural communities,” said Marnix Monsfort, FMO’s Financial Institutions office director.

FMO and BII announced their joint commitments of up to US$20 million each to Dashen on Monday.

This has made the pair the first foreign financial institutions to provide long-term funding to Ethiopia’s financial services sector under the Central Bank’s 2021 intermediation directive for banks.

Asfaw Alemu, CEO of Dashen Bank said Dashen was “pleased to achieve this historic milestone”.

“With the exemplary co-lending of BII and FMO, Dashen Bank is breaking the ice in the materialization of the directive for foreign loans intermediation,” Asfaw said.

Per the CEO, the forex-denominated financing will enable the Bank with a footprint of 800 plus branches, “to support export-oriented agribusinesses.”

“On top of the badly needed foreign currency, the lessons learnt through the rigorous due diligence process will help us set the bar high when it comes to sustainable financing in Ethiopia. 

“We are extremely grateful to our partners BII and FMO for putting their trust in Ethiopia’s agricultural sector, and Dashen Bank’s capacity to deliver results,” Asfaw added.

The collaboration is expected to help catalyze the market, build confidence amongst international and domestic investors so as to mobilize more private capital.

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