The International Finance Corporation (IFC) has announced a $10 million local currency loan to VisionFund Microfinance Institution, marking the first ever loan of its kind from an international investor to a financial institution in Ethiopia. The investment is designed to support economic activity and small business growth, with a special focus on women entrepreneurs and those in rural areas.
This initial loan is the first part of a larger, planned $30 million total commitment from the IFC. The financing will allow VisionFund to significantly expand access to credit for micro, small, and medium-sized enterprises (MSMEs) throughout Ethiopia. At least half of the proceeds will be specifically dedicated to women-owned businesses.
Taye Chimdessa, CEO of VisionFund, called the partnership a “historic milestone” for both his organization and the country’s financial sector. “With this investment, we are better positioned to empower entrepreneurs, strengthen rural economies, and bring inclusive financial services closer to families who need them most,” he said.
The investment is supported by the IDA Private Sector Window, which will provide affordable, local currency funding in a market where it is often scarce.
“This landmark investment reflects IFC’s strong and growing commitment to fostering inclusive economic growth and promoting opportunities for entrepreneurs in Ethiopia,” said Ethiopis Tafara, IFC Vice President for Africa.
In addition to the loan, the IFC will provide targeted advisory support to help VisionFund with its strategic business planning, risk management, and its future transformation into a microfinance bank.
The IFC’s investment aims to enhance VisionFund’s long-term sustainability and improve service delivery for its clients. The move sets a new standard for responsible and affordable microfinance in the country.