The International Finance Corporation (IFC) has approved a $10 million local currency loan for VisionFund Microfinance Institution, in what is being hailed as a landmark move for Ethiopia’s financial sector. This marks the first local currency investment from an international lender into the country’s banking and microfinance landscape.
The loan is part of a wider $30 million financing plan designed to expand access to credit for micro, small, and medium-sized enterprises (MSMEs). At least 50% of the proceeds will be dedicated to supporting women-led businesses and rural entrepreneurs, two groups often underserved by traditional lenders.
VisionFund CEO, Taye Chimdessa, described the deal as a “historic milestone”, noting that the funds will empower entrepreneurs, strengthen rural economies, and expand inclusive financial services.
The transaction is supported by the International Development Association (IDA) Private Sector Window, a facility aimed at de-risking private investments in fragile and low-income markets. With affordable financing still scarce in Ethiopia, the IFC believes this investment will help drive economic resilience.
Ethiopis Tafara, IFC Vice President for Africa, emphasized that the initiative underscores IFC’s long-term commitment to inclusive growth in Ethiopia. He stated that the financing will not only expand credit but also foster broader opportunities for financial inclusion.
Beyond the funding, IFC will provide advisory support to VisionFund, including strengthening its strategic planning, improving risk management systems, and guiding its transition into a fully licensed microfinance bank. This transformation is expected to set a new benchmark for affordable and sustainable microfinance in Ethiopia and across Africa.
With Ethiopia’s MSMEs playing a crucial role in job creation and poverty reduction, this development signals renewed momentum in channeling capital to businesses that form the backbone of the country’s economy.
