The African Development Fund (AFD), the concessional financing window of the African Development Bank (AFB) Group, has approved a grant of $42.86 million to Ethiopia on May 22nd to support the Agri-MSMEs Development for Jobs Program. This initiative aims to enhance the growth and productivity of micro, small, and medium-sized enterprises (MSMEs) led by youth and women in Ethiopia.
The program focuses on improving access to finance, providing business development services and strengthening the entrepreneurship enabling environment. This effort is bolstered by an additional $10 million contribution from the Development Bank of Ethiopia and $6.24 million from the Ethiopian Government totaling an investment to eliminate financial barriers for youth and women entrepreneurs in Ethiopia.
AFDB Deputy Director General for East Africa, Dr. Abdul Kamala, stated, “The project interventions are timely and will support major sector reforms that will help strengthen the strategic and institutional framework for financial inclusion, and youth- and women-led entrepreneurship development in Ethiopia”
The project aims to impact over 8,000 micro, small and medium enterprises, with a focus on two major pillars.
The first pillar aims to expand access to finance and non-financial services for youth and women-led agri-MSMEs. This includes strengthening institutional capacity for service providers and supporting financial institutions to increase lending to these entrepreneurs.
Enhancements in business development services will promote stronger linkages among service providers ultimately improving the quality and range of services offered.
Ms Martha Phiri, AfDB Director for Human Development confirmed that “the project focus on youth and women entrepreneurs will immensely contribute to advancing the inclusive growth agenda and gender commitments of the Bank”.
The second pillar focuses on establishing the Youth Entrepreneurship Investment Bank (YEIB) framework which will provide long-term financial and non-financial support to mitigate risks for youth entrepreneurs. The YEIB will oversee an equity investment fund to offer patient capital to youth businesses and work closely with a national Public Credit Guarantee Scheme and the Entrepreneurship Development Institute to build MSME capacity.
“The YEIB aims to transform hurdles for young entrepreneurs by acting as ecosystem anchor, convening stakeholders, achieving financial synergies, and establishing youth entrepreneurs as an attractive investment asset class.” The Bank’s Acting Director of Financial Sector Development, Mr. Ahmed Attout explained.
This comprehensive approach seeks to foster a supportive environment for Ethiopian youth and women entrepreneurs, driving economic growth and development.
