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Support mission Development Bank Ethiopia

Project purpose

Improving access to finance for smallholders in the high potential sector of Food & Agriculture, Ethiopia.

Project results

  • Analysis of relevant value chains
  • Assessment of stakeholders involved
  • Identification of gaps in access to finance for these stakeholders
  • Improved bankability of relevant stakeholders



Addis Ababa


Rabo Development




€ 200,000

Project status

Implementation phase

Project activities

The Dutch implementation team will be asked to work in close cooperation with EKN, eg whilst selecting eligible banks..

Inception phase

An inception stage is necessary in order to assess the target group, needs and commitment of Ethiopian parties. This short stage will be followed by a go/no go decision and further detailing of the project plan and planning of the actual capacity building project.

Implementation phase

With regard to the first track: strengthening of financial institutions to provide financing to the selected sectors,

the Dutch implementing team should at least:

  • Select eligible (commercial) banks and/or MFI’s and/or SACCO’s. Focus will be on commercial banks since scale is required to really make impact. However, also MFIs and Sacco’s can have a role as intermediary to the segments that commercial bank cannot reach. Financial institutions with an existing Food & Agricultural portfolio will be the target group;
  • Assess these institutions on their capacity to provide financing to the sectors (incl. products, procedures, turn-around times, pricing, agri-knowledge, branch network, etc.) in a sustainable way;
  • Design a capacity building program to strengthen the financial institutions’ capacity to finance the selected sectors (this could include specific training on sector risks & issues, calculating the payment capacity in these sectors, risk management, developing suitable financial schemes, and knowledge management).

 If the outcome of this assessment shows points for improvement a detailed capacity building program will be made to strengthen the selected organizations. It is key to limit the group of FIs initially to a small number to avoid loss of focus.

Part of this project is to assess areas of cooperation between SACCO’s, MFI’s and commercial banks. The rationale of this linkage program is that the strength of one party offsets the weakness of another party through partnership and vice versa.

With regard to the second track: strengthen the organization of actors in the Food and Agricultural sector,

the Dutch implementing team should at least:

  • Map the value chains of the selected sectors; analyse of linkages, strengths and weaknesses, risks and opportunities, gross margin analysis (to show where the profits are made in the value chain);
  • Assess the stakeholders involved and their (financial) needs (e.g. characteristics and (financial) needs of the farmers and farmer groups, traders and processors);
  • If necessary design a technical assistance plan to improve the bankability of the stakeholders and identify suitable technical assistance providers.

The overall goal of the mapping under Phase 1 is to identify the key gaps to get access to finance. If the gaps need a long-term solution this item should be addressed in the ‘round table’, to be organised by EKN in Addis Ababa (mentioned under “Institutional setting”).

The gaps which can be solved on the short term will be part of the project described in this document. The cooperatives involved in the value chain will get extra attention, because a well-functioning cooperative system helps farmers to strengthen their position in the chain. This assessment should be done in close cooperation with the Ethiopian Agricultural Transformation Agency (ATA).

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