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Team Europe Supports MSMEs in Ethiopia through EU-funded NASIRA Guarantee Programme

12.02.2025

Introduction:

The NASIRA guarantee programme funded by the European Union and implemented by Dutch FMO will allow the Cooperative Bank of Oromia to extend its funding to agricultural, youth and women-owned Ethiopian MSMEs, often underserved by banks.

Objectives:

The 1.5 million Micro, Small and Medium Enterprises (MSMEs) in Ethiopia are the backbone of the economy, providing a vital source of income and job creation. However, only 6% of these enterprises have access to finance, severely limiting their growth and Ethiopia’s overall economic development. Ethiopian banks often view small entrepreneurs as high-risk clients, largely due to their lack of collateral.

To address the issue, the NASIRA programme funded by the European Commission and managed by the Dutch Entrepreneurial Development Bank (FMO) aims to enhance financial inclusion for agricultural, youth and women-owned MSMEs. By implementing a risk-sharing arrangement, where the NASIRA loan portfolio guarantee covers potential credit losses, the Cooperative Bank of Oromia (Coopbank) will be able to extend its lending services to micro and small entrepreneurs across Ethiopia.

As one of the largest banks in Ethiopia, with a vast customer base of 13.3 million and a nationwide network of 750 branches, Coopbank already plays a crucial role in supporting agricultural MSMEs and cooperatives. The NASIRA guarantee will enable Coopbank to further develop its efforts in improving financial inclusion through innovative and digital products, ultimately bridging the financial gap and unlocking the growth potential of Ethiopia’s MSMEs.