Agri-Finance Navigator

What opportunities do agricultural micro, small, and medium enterprises (agri-MSMEs) have in Ethiopia when accessing finance (particularly debt-finance)? What challenges do they face? And how can we improve the status quo?

The agriculture sector is vital for Ethiopia’s economy, contributing to one-third of the GDP and employing 2/3 of the workforce. Yet, it has not unfolded its full potential. The core challenge that agri-MSMEs (as well as MSMEs in general) face is access to finance: Ethiopia ranks 159 out of 190 in the World Bank's Ease of Doing Business Ranking, with the most challenging aspect being getting credit. Challenges arise from the supply side, demand side, and at system level, and are heightened for agribusiness models.

The Agri-Finance Navigator, thus, seeks to analyse the financial ecosystem and services, providing insights into the status quo of financing for agri-MSMEs in Ethiopia by mapping the local actors in the country’s financial ecosystem (banks, microcredit institutions, and fin-techs), analysing current gaps and challenges and providing recommendations to the different actors to tackle these challenges. Moreover, the study informs MSMEs in the agricultural sector - the target group of BIC Ethiopia - about financing opportunities that can benefit them and how they can be accessed. The document also draws up recommendations tailored to the interests of the relevant target groups (agri-MSMEs, financial institutions, intermediaries, and public institutions).

The Agri-Finance Navigator is part of the BIC Ethiopia project and was prepared by the project partner adelphi together with the project partner Addis Ababa Chamber of Commerce & Sectoral Associations (AACCSA). The four-year project is co-financed by the European Union and implemented by sequa in cooperation with five highly committed partner organisations: AACCSA, adelphi, Growth Africa, icehawassa, and Menschen für Menschen (MfM). The project aims to capacitate business incubators in supporting agri-tech and agri-business start-ups and MSMEs to improve market access, generate higher income, and create jobs.