The European Investment Bank (EIB) has pledged US$110 million in funding to Ethiopia, specifically targeting the expansion of rural finance and supporting the country’s broader development agenda. The commitment, secured by Finance Minister Ahmed Shide on the sidelines of the World Bank/IMF Annual Meetings, will finance the third phase of the Rural Financial Intermediation Program (RUFIP III). This flagship initiative is critical for driving financial inclusion and accelerating the nation’s agricultural transformation efforts.
The funding is designed to be on-lent to smallholder farmers and women through the Development Bank of Ethiopia (DBE), micro-finance institutions (MFIs), and rural savings and credit cooperatives (RUSACCOs). The ultimate goal is to increase access to credit in rural areas, leading to enhanced productivity, value addition, higher incomes, and improved food security, directly contributing to UN Sustainable Development Goals (SDGs) for poverty and hunger eradication.
The EIB’s commitment is part of a deepening partnership with Ethiopia, which includes ongoing support for Small and Medium Enterprise (SME) finance, water and sanitation (WASH) projects, and women’s entrepreneurship development. Ethiopia’s Finance Minister also outlined priority areas for future European support, highlighting the Rural Inclusive and Sustainable Economic Development (RISED) Initiative and financing for the manufacturing sector, underscoring a joint commitment to fostering sustainable and inclusive economic growth.
