IFC Announces Landmark Local Currency Loan to Support Small Business Growth in Ethiopia

Addis Ababa, Ethiopia, September 8, 2025—To support economic activity and small business growth in Ethiopia, with a focus on women entrepreneurs and in rural areas, IFC today announced a loan to VisionFund Microfinance Institution, the first ever local currency loan to a financial institution in Ethiopia from an international investor.

IFC’s $10 million equivalent loan to VisionFund in Ethiopian birr is the first tranche of a total $30 million equivalent planned commitment, which will include $20 million from IFC’s own account and $10 million mobilized from other investors.

The financing, which marks IFC’s first local currency loan to Ethiopia’s financial sector, will enable VisionFund to expand access to credit for micro, small, and medium enterprises (MSMEs) nationwide, with at least half the proceeds dedicated to women-owned businesses. VisionFund Microfinance Institution S.C. (VFMFI) is Ethiopia’s largest privately held, deposit-taking microfinance institution.

The investment is supported by the IDA Private Sector Window’s Blended Finance Facility and Local Currency Facility, which will enable affordable, local currency funding in a market where such financing is scarce.

“This partnership with IFC marks a historic milestone, not only for VisionFund but for Ethiopia’s financial sector at large,” said Taye Chimdessa, CEO of VisionFund Microfinance Institution S.C. “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. At VisionFund, we see this as more than financing, it is a promise of hope, resilience, and opportunity for our clients and the communities we serve.”

“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. “Our partnership with VisionFund Microfinance will deliver lasting impacts to smaller businesses in Ethiopia, with as strong focus on women-run businesses, while strengthening the country’s financial sector.”

In addition to financing, IFC will deliver targeted advisory support to strengthen VFMFI’s strategic business planning, risk management, and responsible finance practices, and to assist in its planned transformation into a microfinance bank.

By combining capital with capacity building, IFC aims to enhance VFMFI’s long-term sustainability, improve service delivery to clients, and set a benchmark for responsible, reliable, and affordable microfinance in Ethiopia.

IFC has committed $605 million in fiscal year 2025 in Ethiopia across telecom, agribusiness and manufacturing. Key focus sectors, as aligned with IFC’s 2030 strategy, include agribusiness, infrastructure (renewable energy, telecom and logistics), manufacturing (pharmaceuticals and sectors supporting the construction industry), and housing.