References | Africa, south of Sahara

Evaluation of guarantee instrument and technical assistance offered to Enat Bank to increase access to capital for women owned/managed Small Medium Enterprise in Ethiopia


Market Development

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The Embassy of Sweden in Addis Ababa – Ethiopia on behalf of the Swedish International Development Cooperation Agency (Sida) together with the United States Agency for International Development (USAID)U.S. International Development Finance Corporation (DFC) as co-guarantors and Enat Bank (guaranteed party) signed a tri-party portfolio guarantee agreement of 10 MUSD (100 MSEK), with a guarantee period of 7 years (1 October 2016- 31 March 2023). In addition to the guarantee, technical assistance (TA) support has been provided to Enat Bank. 


This contribution follows the Swedish strategy for development cooperation for Ethiopia (2016-2021), which well reflects local public priorities for economic development as articulated in Growth and Transformation Plan II (GTP), the national development plan for Ethiopia (2016-2020). As such, the contribution is well in line with Swedish priorities outlined in the Results Strategy area three for Sweden’s cooperation with Ethiopia  themed; Better opportunities and tools to enable poor people to improve their living conditions. The aim of this strategy area is to improve opportunities for productive employment with decent working conditions and to promote a more favorable business climate for inclusive commercial activities especially for women and young people. Further, the contribution is also aligned with Sida's ambition to promote innovative financing approaches where Sida, USAID/DFC and Enat Bank have a risk-sharing matrix with the aim to secure mobilization of institutional capital.


Despite Ethiopia having a Small and Medium Enterprises (SMEs) strategy in place, SMEs especially women-owned businesses are particularly disadvantaged due to their relatively small size in terms of earnings, none or shorter credit history, none or fewer assets for collateral, less structure and formality in operations among other challenges. Additionally, the lenders have limited experience in lending to the SME sector especially with the traditional practice of collateral-based lending and the know your customer (KYC) requirements. The obstacle of low access to finance often means less than optimal growth for SMEs hence a missed opportunity for employment creation and economic growth.


For this guarantee facility, the target group is delimited to SME’s that are private, non-sovereign enterprises registered in Ethiopia, are at least 51% owned by women, at least 51% managed by women (those with senior management or Board of Directors comprised of at least 51% women), or have at least 51% female employees, and within the priority sectors of services, manufacturing and agriculture. Sida’s particular focus on SME’s that are women-owned or women managed is intended to have an increased rate of financial inclusion and sustainability in Ethiopia’s growth process.


The evaluation object is the Guarantee Enat Bank, a guarantee between Sida, USAID/DFC and Enat Bank in Ethiopia.


The purpose of the evaluation is to: i) Assess the performance of the Enat Bank Guarantee by analyzing the extent to which the desired outcomes have been achieved, isolating important lessons derived from implementation of the guarantee facility and role of the technical assistance. ii) Receive a stakeholder mapping and provide recommendations for future guarantee prospects and innovative financing opportunities in Ethiopia iii) Identify needs for technical assistance within innovating financing while looking for different options for technical assistance support in line with the new development strategy.

The purpose or intended use of the evaluation is to help Sida and its partners assess the progress of on-going Enat Bank Guarantee to learn from what works well, challenges, areas of improvement and opportunities. The evaluation will be used to inform decisions on how future Sida guarantees in Ethiopia will be implemented as well as which other opportunities for innovative financing and technical assitance are available in the market, and are in line with the Sweden-Ethiopia development strategy.