Ethiopia, a country known for its rich agricultural heritage and diverse agri-business landscape, is on a journey towards economic transformation. This transformation is fuelled by initiatives like the BIC Ethiopia project, a four-year endeavour co-financed by the European Union and implemented by sequa in collaboration with five dedicated partner organizations. The project’s primary objective is to empower business incubators to support agri-tech and agri-business start-ups and MSMEs, ultimately enhancing market access, boosting income, and generating employment opportunities.
As a significant milestone in this project, the BIC Ethiopia Agri-Finance Lab took centre stage on September 20-21, 2023. This two-day event was a remarkable gathering of financial stakeholders, including banks, microfinance institutions, investors, and fintech companies, all converging to address the challenge of agricultural financing in Ethiopia. The Agri-Finance Lab was not merely a conference; it was an arena for innovative financing solutions to flourish, marked by competition, collaboration, and knowledge exchange.
At its core, the Agri-Finance Lab was an out-of-the-box financing innovation competition that challenged expert teams to co-creatively develop innovative financial instruments with a strong focus on agri-finance and MSMEs. These financial instruments aimed to bridge the gap between the available capital and the financial needs of agri-SMEs, fostering sustainable growth in the sector. The competition didn’t just rely on the ingenuity of participants; it also encompassed a comprehensive training component. The participants had the opportunity to engage directly with Catalyser graduate enterprises, gaining insights into the real-world challenges and opportunities faced by agri-SMEs. These interactions allowed financial stakeholders to align their innovative solutions with the needs of the sector, resulting in more practical and relevant financial instruments. The goal is to refine these solutions internally before presenting them to a broader audience at the upcoming Ecosystem Festival in November 2023 in Addis Ababa.
Another product of BIC Ethiopia is the recently released Agri-Finance Navigator. This comprehensive snapshot of the Ethiopian Agri-SME financing ecosystem is a collaborative effort of the project partners adelphi, and the Addis Ababa Chamber of Commerce & Sectoral Associations (AACCSA). The Agri-Finance Navigator acts as a guiding tool, offering insights into the complex world of agricultural finance. The study informs MSMEs in the agricultural sector – the target group of BIC Ethiopia – about financing opportunities that can benefit them and how they can be accessed. The document also draws up recommendations tailored to the interests of the relevant target groups (agri-MSMEs, financial institutions, intermediaries, and public institutions).
These initiatives of BIC Ethiopia are laying the groundwork for a more accessible and efficient financial ecosystem, to support fostering growth and economic development in Ethiopia.