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South Asia

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Latin America / Caribbean

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Sub-Saharan Africa
• Cameroon
• Ethiopia
◦ ACSI
    ◦ SFPI
    ◦ Yibeltal's story
• Ghana
• Nigeria
• Rwanda
• Uganda

United States

Grameen Foundation : Where we work : Sub-Saharan Africa : Ethiopia

Ethiopia

The Need in Ethiopia

• The life expectancy is 43 years old
• The literacy rate is 35.9 percent
  
• Close to 80 percent of the population live on less than $2 a day
• 3.1 million people are at-risk for malaria

Ethiopia has the second largest population in Sub-Saharan Africa, with the majority of its population living in rural areas where agriculture and related activities remain the main source of income. Forty-five percent of the population lives below the poverty line and close to 40% of households in Ethiopia are headed by women. According to the United Nation’s Human Development Index, Ethiopia is one of the world’s poorest countries, ranking 169 out of 174 countries.

Formally started in 1996, Ethiopian MFIs have expanded rapidly in their outreach efforts to the poor. In 1999, they succeeded in reaching nearly 500,000 clients and delivered an estimated 526 million birr ($64.5 million) in loans. By 2005, outreach topped 1.2 million, marking growth of over 700,000 clients in 6 years. However, this is just a fraction of the estimated 6 million Ethiopians who are living in poverty and could benefit from microfinance.

Currently, the microfinance sector in Ethiopia is highly regulated and largely government funded. Despite the government’s emphasis on poverty-focused microfinance, the supply of microfinance is well below demand and there is a significant lack of financial resources to expand the number of loans available to the country’s poorest people.
While unregulated money lenders continue to fill the gap in Ethiopia, lack of linkages between formal banks and microfinance institutions have severely limited the capacity of MFIs to provide access to safe, affordable financial products. Currently, the responsibility to register and license all institutions providing financial services, including MFIs, falls on the National Bank of Ethiopia (NBE). Nevertheless, the NBE has been unable to properly regulate registered MFIs due to its lack of microfinance knowledge and experience.

In 2007, Grameen Foundation partnered with two microfinance institutions (MFIs) in Ethiopia: Amhara Savings and Credit Institution (ASCI), the largest MFI in Ethiopia located in Bahir Dar, and Specialized Financial and Promotional Institution (SFPI), a small MFI located in Addis Ababa. GF has also worked closely with the Association of Ethiopian Microfinance Institutions (AEMFI) to provide training and support to a range of microfinance stakeholders in the country, including the NBE, and create a strong and sustainable microfinance sector.

Our partner microfinance institutions in Ethiopia: ACSI, SFPI

Ethiopia success story: Yibeltal

Grameen Foundation : Where we work : Sub-Saharan Africa : Ethiopia