IFC and Ethiopia Commodity Exchange to Increase Lending for Agricultural Producers
In Nairobi:
Houtan Bassiri, IFC
Phone: + 254 20 275 9000
E-mail: hbassiri@ifc.org
In Washington, DC:
Lotte Pang, IFC
Phone: + 1 (202) 458-0952
E-mail: lpang@ifc.org
In Addis Ababa:
Tilahun Bekele, Ethiopia Commodity Exchange
Phone: +251-115-531364; +251-911-403402
E-mail: tilahun.bekele@exc.com.et
Nardos Lemma, Ethiopia Commodity Exchange
Phone: +251-115-531364; +251-911-026446
E-mail: nardos.lemma@ecx.com.et
Addis Ababa, Ethiopia, June 12, 2009—IFC,
a member of the World Bank Group, and the Ethiopia Commodity Exchange (ECX)
announced today they will work together to increase loans to Ethiopia’s
agricultural producers, which contribute half of the country’s economic
output and the majority of its exports revenues and employment.
IFC and ECX will work together over the next two years to design financial
instruments and advocate for any required regulatory and legal changes
so that banks can accept warehouse receipts as collateral for loans. ECX
issues the receipts, which guarantee the quality, quantity, and security
of produce, to agricultural producers who deposit their commodities in
its warehouses. IFC and ECX will also work together to increase the capacity
of banks to extend loans based on warehouse receipts.
“The Ethiopia Commodity Exchange has successfully promoted many regulatory
changes so that agricultural producers can use warehouse receipts to receive
bank loans,” said Dr. Eleni Gabre-Mahdhin, Chief Executive Officer of
ECX. “IFC’s global experience and expertise designing financial
instruments will be a valuable asset to help further promote lending to
an important sector of Ethiopia’s economy.”
Agriculture accounts for about half of GDP, 60 percent of exports, and
80 percent of Ethiopia’s employment. But farmers and producers have difficulty
accessing finance due to the type and level of collateral that banks require.
“Promoting agribusiness is an important focus of IFC’s mission to support
the private sector and promote economic development in Ethiopia,” said
Aliou Maiga, IFC Resident Representative in Ethiopia. “Working with the
Ethiopia Commodity Exchange will enable IFC to increase access to finance
for agricultural producers in Ethiopia, an important driving force of the
economy.”
IFC opened a new office in Ethiopia in November, 2008. Its strategy in
Ethiopia focuses on proactively developing new investment projects, supporting
public-private partnerships that promote economic growth, and mobilizing
direct investments to key sectors of the economy, including agribusiness,
financial services, health and education, infrastructure, manufacturing,
and tourism.
About Ethiopia Commodity Exchange (ECX)
The Ethiopia Commodity Exchange is a marketplace where buyers and sellers
come together to trade, assured of quality, delivery, and payment. ECX
assures all commodity market players the security they need in the market
through providing a secure and reliable end-to-end system for handling,
grading, and storing commodities, matching offers and bids for commodity
transactions, and a risk-free payment and goods delivery system to settle
transactions, while serving all fairly and efficiently.
Established by a proclamation passed by the Ethiopia Parliament in June
2007, ECX is authorized to trade in both spot and futures contracts, initially
starting with spot contracts for immediate delivery. ECX launched live
trading on April 24, 2008. It currently offers standardized trading contracts
in white and mixed maize, hard and soft wheat, processed and unprocessed
pea beans, and sesame by origin (Humera, Gonder, and Wollega). For more
information, visit www.ecx.com.et.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, visit www.ifc.org.
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