Abyssinia, MFIs Ink 600m Br Loan Agreement

Jul 24 , 2021

The Bank of Abyssinia has agreed to provide 600 million Br in loans to four microfinance institutions (MFIs) as part of its efforts to comply with the central bank's policies. Facilitated by the Mastercard Foundation's BRIDGES Programme, Dynamic, Harbu, Metemamen and Nisir MFIs signed the agreement with the Bank during a ceremony held at the Skylight Hotel last week. In turn, the MFIs will use the funding to provide loans to smallholder farmers, micro, small and medium enterprises and other entities that face difficulties in borrowing from banks as they lack collateral. The agreement is part of a larger effort to implement a directive from the National Bank of Ethiopia (NBE) to enforce the operationalisation of a movable collateral registry. Passed last year, the directive states that all financial institutions are expected to extend loans to cooperative unions and small and micro enterprises in the agricultural sector.