Dashen Bank, one of Ethiopia’s leading private banks, has partnered with global nonprofit Accion and the Mastercard Center for Inclusive Growth to enhance digital financial services for small businesses. This collaboration focuses on expanding access to financing for micro, small, and medium enterprises [MSMEs], with a particular emphasis on women-owned businesses.
Ethiopia has nearly two million MSMEs that play a crucial role in the economy. Yet only 6% of micro enterprises and 1.9% of small enterprises have access to formal credit. The sector faces a financing gap of $4.2 billion, with barriers including unemployment, low incomes, and limited financial education. Additionally, only 39% of women have accounts at formal financial institutions. This is compared to 55% of men, restricting their participation in the digital financial ecosystem.
Photo: Accion
Digital Innovation Hub to Support Ethiopian MSME Growth
Dashen Bank has been a pioneer in digital banking in Ethiopia. Launching one of the country’s first digital wallets to facilitate seamless transactions for small businesses. Now, in partnership with Accion, the bank is establishing an innovation hub to develop tailored financial solutions for MSMEs. Many of these businesses still operate in cash, lack collateral, and remain invisible to traditional banks. The innovation hub aligns with Dashen’s strategic vision to drive financial inclusion and economic development through technology.
According to Asfaw Alemu, CEO of Dashen Bank, small businesses, especially those led by women, struggle to access financing. This is because of cash-based transactions and a lack of financial records. This partnership aims to overcome these challenges by improving credit offerings. It will also build operational capacity, and introduce new digital financial products to support business growth.
Yohannes Million, Dashen Bank’s Chief Digital and Information Officer, highlighted that
This hub will serve as a dedicated facility to provide MSMEs with digital banking solutions, enhancing their efficiency and growth potential.
Accion will support Dashen in developing AI-driven credit scoring models and embedded finance solutions that cater to MSMEs. These innovations will enable businesses to access credit from suppliers and receive non-financial support such as business management tools.
Dashen Bank has issued a tender for the construction of the innovation hub. It has reinforced its commitment to leveraging technology for financial inclusion. The bank also plans to hold an innovation workshop with a global technology partner to explore advancements in AI and financial services.
Accion and the Mastercard Center for Inclusive Growth have an eight-year partnership aimed at transforming financial services and benefiting 23 million people across 25 countries. Through this initiative, they seek to build a more inclusive financial ecosystem that supports the growth and resilience of MSMEs in Ethiopia.
