The African Development Bank Group (AfDB) has approved a $40mn risk cover to support Dashen Bank’s trade finance activities.
- •The facility, known as a transaction guarantee facility, is meant to support Small and Medium Sized Enterprises (SMEs) and local corporates’ import and export trade finance.
- •In it, AfDB will provide a guarantee of up to 100 percent to confirming banks for the non-payment risk arising from the confirmation of Letters of Credit and similar trade finance instruments issued by Dashen Bank.
- •Dashen Bank is the oldest and second largest privately owned bank in Ethiopia.
“This much-needed guarantee facility will be instrumental in expanding our bank’s trade services across the region and beyond,” Asfaw Alemu CEO of Dashen Bank said.
“Trade finance is an important driver of economic growth and is critical for cross-border trade, particularly in emerging markets. We are delighted to work with Dashen, a strong partner with extensive knowledge and network in Ethiopia, on a shared ambition to support the region’s Trade,” African Development Bank’s Director General for East Africa, Nnenna Nwabufo.
In August 2023, FMO (Dutch entrepreneurial development bank), British International Investment, and the Development Finance Institution (DFI), committed US$20 million to Dashen Bank to support agriculture and foreign exchange. It has also signed a separate deal with International Finance Corporation, a member of the World Bank Group, to strengthen its credit facilities to MSMEs.
In its last results, Dashen Bank reported ETB 6.6 billion in profits. It has taken a lead in the recent decision to float the Birr, which led to a rapid devaluation of the currency.
