Ethiopost managers have upheld the responsibility of acquiring an e-commerce software application underlining the importance of strengthening the capacity of Ethiopia’s oldest institution for domestic and cross-border services.

A committee comprising the CEO Hanna Arayaselassie and her senior management staff was formed to oversee the procurement process. They expect to complete deploying the project within three years.

Ethiopost has been providing postal services since its establishment in 1894. Designated mail operators have had to reinvent themselves to optimise their operations and venture into new business areas to remain competitive, given the fierce competition in the postal and logistics sector, especially with the advent of e-commerce. Tasked with providing universal postal service, the institution has announced its intention to reform its institutional set-up, as well as operational and financial systems.

According to the World Bank, Ethiopost has immense potential to broaden small and medium enterprises (SMEs) to network facilitation, showcase their products to customers, and pave digital transaction services. The World Bank recently hired a consultant, Shimeles Woldehawariyat, to oversee the procurement process after EPS submitted a term of reference two months ago, disclosed Mengistu Bessir, finance officer for SMEs.

The project dubbed “Access to Finance for Small and Medium Enterprises (SMEs)” has two phases, each having four components: Lease Financing and Working Capital; Enabling Environment; Business Development Service; and Project Management Communication.

“The project will address the missing middle challenge, providing financial and technical resources to SMEs and financial intermediaries in Ethiopia,” said Francesco Strobbe, the project’s team leader.

This forms part of Ethiopia’s broader digital transformation strategy, laying out the roadmap for creating a “Digital Ethiopia” by 2025.

The Development Bank of Ethiopia facilitated the first component of the second phase, having nine commercial banks and microfinance institutions onboard. The National Bank of Ethiopia (NBE) floated the second component with an additional three million dollars. The Bank launched a  movable property collateral loan and advance information system scheme its executives christened as “Credit Information System”. It was completed last month after two years of effort to hire a contractor.

The software will enable banks and microfinance institutions to access real-time information on small and medium borrowers. The data collected be available for all the commercial banks and nine microfinance institutions. It also helps SMEs to register movable assets as collateral against loans.

“The system will hold SMEs registry information in any bank and microfinance institution,” Yemenzwork Girefe, finance project coordinator under the Ethiopian Enterprise Development (EED), told Fortune.

Ethiopost launched the third component with six million Birr, additional finance from the World Bank. The project was launched a year after the postal service entered a contractual agreement with the EED to build an electronic commerce platform.

“The project will mainly focus on the manufacturing sector,” said Yemenzwork.