Addis Ababa – Dashen Bank, a leading private lender in Ethiopia, has joined forces with global nonprofit Accion and the Mastercard Center for Inclusive Growth to launch an innovation hub to expand digital financial services for micro, small, and medium enterprises (MSMEs). Announced on 18 February 2025, the partnership targets Ethiopia’s nearly two million MSMEs, which drive economic growth but face a $4.2 billion financing gap, with only 6% of microenterprises and 1.9% of small firms accessing formal credit. The hub will prioritize women-owned businesses, addressing a stark gender gap where just 39% of women hold formal accounts compared to 55% of men.
The initiative builds on Dashen’s track record as a pioneer in Ethiopia’s digital banking space, having been the first to introduce one of the country’s first digital wallets. The new hub, a cornerstone of the bank’s sixth strategic plan, will develop tailored products for MSMEs, many of which rely on cash and lack assets, rendering them invisible to traditional lenders. By embedding finance within supply chains and leveraging artificial intelligence for innovative credit scoring, the project seeks to bridge financing barriers and foster economic inclusion. Construction tenders for the facility have been issued, and an innovation workshop is planned to explore cutting-edge technologies.
Asfaw Alemu, Chief Executive Officer of Dashen Bank, outlined the stakes. “Despite their critical contribution to the country’s economic growth, small businesses, particularly those led by women, face significant financing challenges. This is largely due to high reliance on cash-based transactions leading to insufficient formal financial records of their business operations and women’s lack of ownership over assets to meet collateral requirements. Through this partnership, we seek to address these challenges, build our operational capacity, enhance our credit offerings to meet the needs of small business owners, and develop a range of digital products and value propositions to help them access the resources they need to grow their businesses successfully,” he said.
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Yohannes Million, Chief Digital and Information Officer at Dashen, added, “Our innovation hub aims to serve as a catalyst for empowering MSMEs by providing them with tailored digital banking solutions. Based in a dedicated facility, it will drive change as a platform where technology and financial services intersect to fuel progress and improve operational efficiency for our customers.”
Accion’s Raliat Sunmonu, Vice President for Middle East and Africa, emphasized Ethiopia’s potential. “Ethiopia is one of Africa’s fastest-growing economies, and small businesses play a vital role in propelling its growth. Through this collaboration with Dashen Bank – a leader in financial innovation – and other strategic partners we are helping build a more inclusive ecosystem for MSMEs in Ethiopia,” she said. Mastercard’s Subhashini Chandran, Senior Vice President of Social Impact, noted, “Digital financial services are a critical component of that journey. We are excited to partner with Accion and Dashen Bank to develop inclusive financial services that can support the growth and resilience of small business owners in Ethiopia.”
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The hub will offer embedded finance products, such as supplier credit, and non-financial tools like business management support to integrate MSMEs into the digital economy. This aligns with an eight-year Accion-Mastercard partnership targeting 23 million people across 25 countries.
