The upper chamber concurred with the House of Representatives on the proposed legislation, which establishes a legal and regulatory framework for debt factoring, a financing mechanism that allows businesses to convert unpaid invoices and credit sales into immediate working capital without resorting to conventional bank loans.

Leading the debate, Senate Leader Opeyemi Bamidele, said the legislation would create an enabling environment for alternative financing and strengthen liquidity for businesses nationwide.

“The Factoring Assignment and Receivable Financing Bill 2026 seeks to create a regulatory framework that would facilitate the development of debt factoring as an alternative means of financing for domestic and international trade in Nigeria and provide an enabling environment for it to thrive,” Bamidele explained.

He added that the bill defines the framework governing factoring contracts between sellers and financiers, clearly setting out the rights and obligations of all parties involved.

The proposed legislation’s commercial significance was sharpened by the intervention of Senator Adetokunbo Abiru (Lagos East), Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, who described the legislation as a critical lifeline for small businesses suffocating under liquidity constraints.

Abiru told the chamber that African factoring, driven significantly by the African Export-Import Bank (Afreximbank), had grown into a market exceeding $50 billion, yet Nigeria, Africa’s largest economy, remained a marginal player.

He said,

“The size of that market today is in excess of $50 billion, and Nigeria’s share is under one per cent.”

He noted that Egypt and Morocco had already reaped substantial gains from factoring frameworks similar to what the bill proposes.

“Passing this legislation will support our MSMEs in converting credit sales into cash without resorting to conventional borrowing arrangements,” Abiru added.

In practical terms, the law would allow businesses holding unpaid invoices to sell those receivables to a factoring company in exchange for immediate cash, easing the cash flow pressures that have long stunted growth among small enterprises.

The bill also modernises the legal architecture governing commercial transactions and is expected to enhance Nigeria’s competitiveness in regional and global trade.

Following unanimous support from lawmakers, the bill was subjected to clause-by-clause consideration in the Committee of the Whole before being passed and forwarded for presidential assent.

The platform, powered by C2FO and backed by the International Finance Corporation, connects suppliers, large companies and financial institutions on one system.

It allows businesses, especially micro, small and medium enterprises (MSMEs), to access cash tied up in approved invoices without collateral.

At full scale, the platform is projected to generate between $25 billion and $30 billion in annual financing for businesses in Nigeria.

CycleFlow Nigeria Chairman, Segun Ogunsanya, says the launch is designed to solve a basic problem where many small businesses deliver goods or services and wait 60 to 120 days to get paid. During that period, they find it difficult to fund operations, pay staff or take new orders.

With this system, once an invoice is approved by a large buyer, the supplier can choose to receive payment early at a discounted rate. The money can come from banks or the buyers themselves.

Segun Ogunsanya, chairman of CycleFlow Nigeria, said the platform addresses a core challenge in the financial system.

“By enabling immediate access to funds locked in accounts receivable, we are not just financing businesses; we are powering economic growth across the entire ecosystem.”

Across Africa, MSMEs make up about 90% of businesses and account for up to 80% of employment. However, access to credit is still limited. In Nigeria, many of these businesses cannot meet bank requirements such as collateral or long credit histories.

CycleFlow takes the risk away from the small business and ties financing to the credit strength of the larger buyer. That structure allows suppliers to access funds faster and on better terms.

On the economic impact, data from the IFC shows that every $1 million in financing for small businesses can create an average of 16.3 direct jobs over two years.

At scale, the platform could support more than 480,000 direct jobs in Nigeria, with indirect employment running into millions.

Mohamed Gouled, IFC’s vice president for Products & Clients, said the model changes how businesses access capital.

“Millions of MSMEs across Africa are sitting on receivables they cannot convert into much-needed capital to grow and hire. This platform changes that equation.”

The system also removes several limitations common in traditional lending. There are no loan applications, no collateral requirements and no lengthy approval processes. Suppliers decide when to access funds and at what cost.

Alexander “Sandy” Kemper, founder and CEO of C2FO, said the launch in Nigeria marks the start of a bigger expansion.

“This launch kicks off our broader strategy to bring affordable liquidity solutions across Africa and other emerging markets worldwide.”

The platform already operates globally and processes millions of invoices daily. It has funded hundreds of billions of dollars in working capital to businesses since its launch.

CycleFlow’s launch in Nigeria comes as the government focuses on stronger support for small businesses. MSMEs are important to job creation and economic growth but still face funding constraints.

Linking buyers, suppliers and financiers in one system, the platform is expected to improve cash flow across supply chains and reduce delays that slow business activity.

SMEs no longer need to wait months to be paid, they can access their money in days.

Speaking at the unveiling recently in Lagos, Yetunde Faulkner, acting managing director of Fast Credit Finance Company Ltd., said the essence of the partnership is to ensure that micro, small, and medium enterprises (MSMEs) become scalable and sustainable through improved access to affordable finance.

“We are here to engage with EDC’s partners, who are SMEs, and provide them the opportunity to access single-digit interest-rate financing through Fast Credit.

“We are offering any amount of loan, starting with N5 million, under a partnership with one of our developmental finance partners, BOI, at a flat monthly interest rate of 0.75 percent, which amounts to nine percent per annum,” she explained.

Faulkner noted that Fast Credit has committed N2 billion to the SME financing partnership, to help entrepreneurs grow revenues faster than costs and remain sustainable.

She added that the loan offering is expected to enable MSMEs to create more jobs, something the Nigerian economy urgently requires.

“We will be touching lives and families, and that, in itself, is one of the goals of Fast Credit, to make a tangible impact in the lives of everyday Nigerians, especially those in Lagos,” she added.

Dr. Nneka Okekearu, director of EDC, described the partnership as a historic step in bridging the funding gap confronting entrepreneurs.

“We have collaborations with several commercial banks, but the double-digit interest rates at which loans are offered have made it tough for entrepreneurs.

“Today, we are doing something historic. We are signing an agreement with Fast Credit for single-digit loans for our members,” she said.

Dr. Okekearu emphasised that access to single-digit credit will significantly boost business productivity.

According to her, manufacturers, for instance, will be able to expand output, while many MSMEs will create more dignified and fulfilling jobs for young Nigerians as they scale up.

“Someone who previously had just N2 million to transact business now has access to N10 million, and that means increased production capacity and healthier margins,” she explained.

She disclosed that entrepreneurs within EDC’s network who meet the requirements will be able to access N5 million at a single-digit rate of nine percent per annum.

Aviomoh Daniel, executive director at Fast Credit, outlined some of the criteria that finance firms consider before extending loans to MSMEs.

“We look out for business worthiness, profitability, and the character of the entrepreneur. Collateral is the last thing any credit firm considers. To be business-credible requires structure, and for security, it is better to register as a limited liability company,” he said.

Feyikemi Odunuga, a business consultant, applauded the collaboration between EDC and Fast Credit for creating easier access to capital for entrepreneurs.

“I feel very good about it. I actually came to represent several of my mentees who always need funding.

“I will help them put things together so they can access the loan. I am a service provider, so this is particularly important for those in the manufacturing sector,” she said.

Kachi Salvation, an EDC alumnus, also described the initiative as “amazing,” noting that it will benefit a large number of businesses.

“A lot of businesses are going to take advantage of this initiative. They will also train women on how to manage their businesses, and this will be done monthly.

“The single-digit interest rate is a huge relief for businesses,” she added.

To access the single-digit loan, applicants are required to provide documents, including a 12-month bank statement, BVN, NIN, TIN of key directors, company profile, valid identification, passport photograph, and verifiable credit history.

Other requirements include a direct debit mandate, utility bill, guarantor details, vendor invoice, as well as collateral valuation and perfection.

The facility disbursed through the Federal Government’s MSME Fund, is designed to stimulate key sectors of the economy, while offering affordable financing to support businesses, with a primary focus on Green Energy, Education, Healthcare, and Women-Owned Enterprises.

UBA’s Group Managing Director/CEO, Oliver Alawuba, who spoke about the facility emphasised the bank’s commitment to fostering economic growth by empowering MSMEs, which he described as the “livewire of any developing economy.

He said,

“At UBA, we recognize the pivotal role MSMEs play in driving economic development, and how they make up a sizeable portion of what drives our economic growth. It is in this vein that we have decided not to rest on our oars by facilitating initiatives dedicated to empowering businesses with the financial support they need to thrive.”

Alawuba maintained that,

“By offering loans at a competitive 9% interest rate with a three-year tenor, we are removing the traditional barriers that hinder SME growth in Nigeria and Africa. And by this, our message to business owners is simple: Don’t let this once-in-a lifetime-opportunity elude you,”

The facility provides a maximum loan amount of N5million per obligor, with a three-month moratorium on principal repayments, ensuring businesses have ample time to stabilise before they begin to service the loans.

UBA’s Group Head of Retail and Digital Banking, Shamsideen Fashola who highlighted the strategic importance of the targeted sectors to the nation’s continued growth, noted that the initiative will strengthen financial inclusion and set the country and indeed the continent on the path of sustainable development.

“We are structuring this facility to align with our broader mission of financial inclusion and economic empowerment. For us at UBA, we will be targeting Green Energy, Education, Healthcare, and Women-Owned Enterprises, which are critical to Nigeria’s sustainable development,” he noted.

Continuing, he said,

“This facility is structured to ensure that businesses in these sectors can access affordable funding, expand their operations, and contribute meaningfully to the economy. We are excited to partner with BOI to make this a reality.”

Also speaking at the loan facility unveiling, Group Head, Marketing and Corporate Communications, Alero Ladipo, took time to highlight the competitive interest rate and government backing as well as urge business owners, especially women to take advantage of the initiative.

“What sets this program apart is its accessibility and affordability. We have worked closely with stakeholders to ensure the terms are business-friendly because we understand the challenges entrepreneurs face. I urge eligible businesses to visit any UBA branch or the bank’s official website to begin their application process right away,” Ladipo stated.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.

Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology

The investment aims to address persistent barriers to finance in these countries, where small businesses often lack access to formal credit.

The loan is expected to help businesses grow and create decent jobs, with a particular focus on women-owned enterprises and climate-resilient agriculture.

“Limited access to finance is a key constraint for small businesses in many developing countries,” says Jakob Larsson, senior investment manager at Swedfund. “This investment supports the expansion of financial services in underserved communities and contributes to Swedfund’s broader objectives of inclusive and sustainable economic development in low-income countries.”

Swedfund has previously provided loans to Platcorp in 2018, 2020, and 2022. In connection with its investments, Swedfund has seen improvements in the company’s environmental and social risk management, including measures related to customer protection and gender equality.

“This renewed partnership with Swedfund marks a significant step forward in our journey toward financial inclusion and sustainable impact,” says Ignatius Obara, executive director of Corporate Affairs, Platcorp Group. “With this support, we will be able to channel more capital to women entrepreneurs, expand access to climate-smart agricultural finance, and continue strengthening our environmental and social practices. Swedfund’s commitment reinforces our shared values of gender empowerment, responsible finance, and job creation across underserved communities.”

Swedfund’s loan is supported up to 50% through a guarantee by the European Union under EFSD+ as a contribution to the Global Gateway investment priority of Financial Inclusion.

This quarter’s session, which is the second for 2025, will hold on Thursday, July 10, 2025 at the UBA House, Marina, Lagos, and is part of the bank’s broader commitment towards business development and financial inclusion.

The UBA Business Series aims to equip small business owners and entrepreneurs with practical strategies to build resilient partnerships, unlock funding opportunities, and navigate the evolving business landscape.

With the theme, “Stronger Together: Building Powerful Business Partnerships for Progress,” this edition of the Business Series will bring together seasoned business leaders, industry experts, and successful entrepreneurs who will share insights on how collaboration and strategic alliances can help MSMEs overcome growth barriers.

An exciting lineup of seasoned business owners including Beauty Entrepreneur, Dabota Lawson; Real Estate Mogul and Entrepreneur, Wale Ayilara; Fashion Entrepreneur, Mai Atafo, and Journalist and TV producer Peace Hyde, will be on ground to arm participants with the tools and network they need to thrive in today’s competitive environment.

Banking: UBA Named Nigeria’s Strongest Brand, Access Bank Most Valuable in 2025

The session will be accessible both physically and virtually, allowing broader participation from the business community as interested participants can register ahead via the link.

Speaking ahead of the event, UBA’s Group Head, Retail and Digital Banking, Shamsideen Fashola, highlighted the critical role of partnerships in today’s dynamic business environment. 

“In an increasingly interconnected world, the power of collaboration cannot be overstated. At UBA, we recognise that collaboration is the cornerstone of sustainable business success.

“The ‘Stronger Together’ Business Series is designed to inspire entrepreneurs and corporate leaders to forge meaningful alliances that drive progress, unlock opportunities, and contribute to Africa’s economic transformation,” Shamsideen said.

Also speaking, the Group Head, Corporate and Marketing Communications, Alero Ladipo, emphasised the UBA’s commitment to empowering the business community through knowledge sharing.

 “The quarterly series represents our dedication to nurturing entrepreneurship and fostering an ecosystem where businesses can thrive through strategic collaborations. Our speakers represent diverse industries and have successfully leveraged partnerships to scale their businesses, create jobs, and drive innovation.”

The UBA Business Series is a knowledge-sharing platform created by United Bank for Africa to empower entrepreneurs and small business owners with the tools, strategies, and insights needed to grow and sustain their businesses.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.

Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.

According to industry watchers, the move will restructure Nigeria’s trade infrastructure and unlock export potential.

Discussions are said to be at an advanced stage for the proposed NETC, which is configured to be an operating entity of ATDC, earlier set up by Afreximbank through the Fund for Export Development in Africa (FEDA), Arise Integrated Industrial Platform (ARISE IIP) and Equitane, in partnership with the African Continental Free Trade Agreement (AfCFTA) Secretariat.

The ATDC was established as a continental trading company mandated to streamline regional trade and transform Africa’s productive capacity.

The continental trading firm will provide market intelligence, logistics, finance and aggregation services to support micro, small, and medium-sized enterprises (MSMEs), smallholder farmers, informal cross-border traders and even larger corporates to participate in international trade under the AfCFTA and globally.

Announced in the presence of President Bola Ahmed Tinubu at the inaugural West African Economic Summit Deal Room in Abuja, weekend, the national export trading company initiative represents a bold shift in enabling Nigerian MSMEs to participate more competitively in regional and global trade through access to modern infrastructure, working capital solutions, and structured market linkages.

The NETC will be developed and operated through ATDC Nigeria, a new joint platform that merges NCX’s institutional role in commodity markets with ATDC’s trade execution and logistics capacity.

The company will directly address long-standing gaps across Nigeria’s export ecosystem – particularly in warehousing, quality control, transport, market access, and financing for smallholder producers and agro-industrial SMEs.

It will play a critical role in reducing post-harvest losses through modern aggregation and storage; structuring commodity exports with traceability and quality control.

It will also provide market intelligence and market access to certified regional and global buyers; facilitate innovative trade finance for SMEs; and revitalise NCX as a hub for structured commodity trade.

The national export trading company initiative is a flagship achievement under the leadership of Dr. Jumoke Oduwole, the minister of Industry, Trade and Investment, reflecting her commitment to bold, market-aligned reforms that bridge Nigeria’s production potential with real, inclusive trade outcomes.

Under her direction, the ministry has driven strategic reforms for investment facilitation, AfCFTA readiness, and trade logistics – all converging in the transformational platform.

Commenting on the emerging NETC, Oduwole stated:

“This is about changing the everyday reality for Nigerian producers – from losses to livelihoods, from being left behind to being export-ready.

“We are creating a system that works for people, for markets, and for the future.”

ATDC reflects Afreximbank’s broader continental strategy to develop country-level platforms that enable intra-African trade, crowd in private capital, and improve the soft and hard infrastructure behind exports.

With similar platforms being deployed across the continent, Nigeria’s Trading Company will stand out for its scale, its institutional depth, and its direct alignment with national food security, industrialisation, and trade goals.

“ATDC Nigeria will not just be an ordinary company – it will be a trade enabler. We are building a trade ecosystem that will provide market intelligence to enable producers to manufacture the products that are required by the market.

“The National ATDC will strengthen institutions like NCX, and help actualize the vision of the Honourable Minister and the Nigerian Government,” said Abdoul Aziz Ba, chief executive officer, ATDC.

The prestigious awards, recognises financial institutions driving impactful support for Micro, Small, and Medium Enterprises (MSMEs) across Nigeria, and UBA emerge as  top performer, coming tops in the following categories: DBM with the Highest Impact on MSMEs in Nigeria;  DBM with the Highest Impact on Women MSMEs; PFI with the Highest Impact in the North-Central Zone; and the Prestigious Platinum Service Ambassador Award, the highest award of the night.

These accolades underscore UBA’s unwavering commitment to empowering businesses, advancing financial inclusion, and supporting women entrepreneurs and underserved communities across Nigeria.

UBA’s recognition at the awards further solidifies its position as leading force in Nigeria’s financial sector, reinforcing its mission to empower small and medium enterprises and businesses and communities through innovative banking solutions.

Mr. Muyiwa Akinyemi, UBA’s deputy managing director, who received the Platinum Service Ambassador Award on behalf of the bank, expressed his delight, stating;

“We are deeply honoured to be recognised by the Development Bank of Nigeria for our efforts in driving sustainable growth and empowerment for MSMEs, particularly women-led businesses and enterprises in Nigeria.

These awards are a testament to our strategic focus on providing accessible financing, capacity building, and innovative solutions that enable small businesses to thrive. We remain committed to fostering economic resilience and prosperity across Nigeria,” Muyiwa said.

Dr. Tony Okpanachi, Managing Director/CEO of the Development Bank of Nigeria, commended UBA’s outstanding contributions, saying:

“UBA has consistently demonstrated exceptional dedication to alleviating financing constraints faced by MSMEs in Nigeria. Their impactful interventions, especially in supporting women entrepreneurs and underserved regions, align perfectly with DBN’s mandate. We celebrate UBA’s achievements and encourage them to continue setting benchmarks in MSME financing.”

The Development Bank of Nigeria Service Ambassador Awards is an annual event that celebrates financial institutions and partners driving transformative change in Nigeria’s MSME sector.

DBN, established to address financing challenges for small businesses, collaborates with banks like UBA to enhance access to credit and business support services.

The Development Bank of Nigeria (DBN) was established to alleviate financing constraints faced by MSMEs in Nigeria through the provision of credit guarantees, capacity building, and partial credit risk-sharing with Participating Financial Institutions (PFIs)

United Bank for Africa is Africa’s Global Bank. Operating across twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

UBA is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally.

• Commitment underpinned by strategic investments, public-private partnerships, and market innovation initiatives
• Focus on enabling MSMEs, scaling cross-border payments, and empowering fintech companies

Africa’s digital payments economy is set to grow from strength to strength according to a Mastercard-commissioned report by Genesis Analytics stating that the digital payments economy is expected to reach $1.5 trillion by 2030.

As a longstanding technology partner to Africa, Mastercard continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.

By fostering collaboration with key stakeholders, Mastercard aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.

Driving Africa’s digital growth

Mastercard’s investments will focus on three key areas to further accelerate digital adoption and financial inclusion:

1. Enabling Africa’s Micro, Small and Medium Businesses (MSMEs)
2. Empowering Africa’s fintech sector
3. Scaling remittances and cross-border payments

“Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead. Mastercard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future,” said Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at Mastercard.

 Africa’s digital transformation is underpinned by rapid advancements in internet penetration and financial inclusion, two of the fastest-growing enablers of digital payments across the continent.

According to the report, internet penetration in Africa is projected to grow at a compound annual rate of 20%, while financial inclusion is set to expand at 6% per year​.

These trends signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.

“For over five decades, Mastercard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development. With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and technologies to support the continent’s continued digital transformation. Our investments today will help build a more resilient economy for the future,” said Mark Elliott, division president, Africa, Mastercard.

1. Enabling Africa’s Micro, Small and Medium Businesses (MSMEs)

Recognizing that MSMEs account for over 50% of Africa’s GDP, Mastercard continues to provide digital solutions that empower small businesses and drive economic expansion.

This commitment is reinforced by the Mobilizing Access to the Digital Economy (MADE) Alliance: Africa, in partnership with the African Development Bank Group.

The initiative aims to extend digital access to critical services for 100 million individuals and businesses over the next decade. As part of its broader goal to bring users onto Community Pass, Mastercard has set a target to register 15 million users in Africa within five years.

Community Pass is a social enterprise initiative that digitizes and connects remote, and rural communities to governments, NGOs, and private sector services.

To further fuel the potential of Africa’s MSMEs, Mastercard will accelerate easy access to its proprietary solutions such as Tap on Phone and SME-in-a-Box.

The technology company will also continue to enable access to finance through its Track Micro Credit Program, which has already benefited thousands of micro merchants. Furthermore, African entrepreneurs will continue to gain knowledge on how to thrive as business owners through free learning resources such as The Entrepreneur’s Odyssey and Mastercard Trust Center.

2. Empowering Africa’s fintech sector

Africa’s fintech ecosystem is a key driver of digital transformation and economic progress. Nearly half of all fintech firms on the continent have been founded in the last six years, collectively raising $6 billion in equity financing since 2000.

Mastercard is partnering with banks, telcos, and other service providers across Africa and internationally to help accelerate fintech growth and expansion in new markets.

For example, Mastercard’s partnership with M-Pesa in Kenya and MTN Group Fintech has enabled millions of unbanked individuals to access digital financial services through mobile money platforms.

Similarly, Mastercard’s collaboration with digital wallet providers and e-commerce platforms has facilitated the integration of payment solutions into digital ecosystems, enabling seamless transactions for consumers and merchants alike.

For example, Mastercard’s global Fintech Express program provides fintech companies with an end-to-end experience for card issuance.

By combining its identity, biometric, AI and open banking capabilities, Mastercard helps protect consumers across the spectrum of internet and payments scams. 

3. Scaling remittances and cross-border payments

Seamless cross-border transactions are essential for Africa’s economic mobility.

According to the World Bank, Africa received approximately $100 billion in remittances in 2023, accounting for about 6% of the continent’s GDP.

Mastercard is playing a key role in enabling the infusion of funds into local economies. Through a single, secure point of access, Mastercard Cross–Border Services allow people and businesses to remit money securely, and with certainty.

Local partnerships such as the recent agreements with Africa’s Access Bank and Equity Bank, are enabling Mastercard to make cross-border payments more simple, convenient, and accessible.

Furthermore, they are enabling customers in multiple markets to make cross-border payments globally via bank accounts, mobile wallets, cards, and cash.

Mastercard remains committed to driving Africa’s digital growth through investment, innovation, and partnerships.

By enhancing financial inclusion, expanding digital transactions, and strengthening cross-border connectivity, the company is helping to build a more inclusive and resilient digital economy for the African future.

Accion is supporting Dashen Bank to build an innovation hub that aims to expand digital banking services to micro, small, and medium enterprises (MSMEs) through a range of new products and a focus on women-owned businesses.

Ethiopia’s nearly two million MSMEs are important drivers of its economy, yet only 6% of microenterprises and 1.9% of small enterprises have access to formal credit. The financing gap in the MSME sector of the country is estimated to be $4.2 billion. 

Unemployment, low incomes, and a lack of financial education remain key reasons for a lack of access to formal financial services. 

Again, only 39% of women — compared to 55% of men — have an account at a formal financial institution, preventing them from accessing the evolving digital financial ecosystem and contributing to the country’s economic growth.

Dashen Bank has long been at the forefront of introducing innovative digital financial products and services in Ethiopia. It was one of the first banks in the country to launch a digital wallet, which helps small business owners make frictionless transactions. 

Now, with the new innovation hub being built with Accion, the bank aims to develop new solutions, embedded in existing supply chains for MSMEs in Ethiopia that still largely transact in cash, have few assets, and as a result, remain largely invisible to big banks. 

The innovation hub is one of the strategic pillars of the Bank’s sixth strategy plan designed to enhance its capacity to support MSMEs. This move is aimed at driving financial inclusion and fostering economic development through innovative digital solutions.

Asfaw Alemu, chief executive officer at Dashen Bank shared, “Despite their critical contribution to the country’s economic growth, small businesses, particularly those led by women, face significant financing challenges. This is largely due to high reliance on cash-based transactions leading to insufficient formal financial records of their business operations and women’s lack of ownership over assets to meet collateral requirements. 

“Through this partnership, we seek to address these challenges, build our operational capacity, enhance our credit offerings to meet the needs of small business owners, and develop a range of digital products and value propositions to help them access the resources they need to grow their businesses successfully. This landmark project underscores our commitment to staying always one step ahead, further cementing our reputation as an industry leader in Ethiopia’s financial sector.”

According to Yohannes Million, chief digital and information officer at Dashen Bank, “Our innovation hub aims to serve as a catalyst for empowering MSMEs by providing them with tailored digital banking solutions. Based in a dedicated facility, it will drive change as a platform where technology and financial services intersect to fuel progress and improve operational efficiency for our customers.”

Through strategic partnerships with those supply chains, Accion will help Dashen develop new products designed for MSMEs, using AI to crunch new types of data and develop new credit scoring models that are better suited to the realities of MSMEs, including those that are women-owned. 

Backed by this new data and extensive research, the innovation hub will build solutions such as credit from their existing suppliers via embedded finance products, and non-financial tools, such as business management support.

Dashen Bank has recently issued a tender to initiate the construction of this forward-looking facility. The innovation hub represents another bold step by the bank toward transforming Ethiopia’s banking landscape, demonstrating its unwavering commitment to harnessing the power of technology to drive progress and support economic empowerment. 

As part of its future roadmap, Dashen Bank will organize an innovation workshop for its leadership and staff, which will explore opportunities in cutting-edge technologies, including artificial intelligence, in collaboration with a globally recognized technology partner.

Raliat Sunmonu, vice president, Middle East and Africa, Accion Advisory said, “Ethiopia is one of Africa’s fastest-growing economies, and small businesses play a vital role in propelling its growth. 

“Through this collaboration with Dashen Bank – a leader in financial innovation – and other strategic partners, we are helping build a more inclusive ecosystem for MSMEs in Ethiopia. Together, we can deploy artificial intelligence and other tech tools to help remove bias and other roadblocks faced by micro, small, and medium enterprises, especially those led by women.”

Subhashini Chandran, senior vice president of Social Impact for Asia Pacific, Europe, Middle East and Africa, Mastercard Center for Inclusive Growth said: “Ethiopia is at a pivotal point in its journey to drive economic growth through inclusive and relevant services for micro and small businesses. Digital financial services are a critical component of that journey. 

“For the last decade, the Mastercard Center for Inclusive Growth has been working to advance financial inclusion around the world. We are excited to partner with Accion and Dashen Bank to develop inclusive financial services that can support the growth and resilience of small business owners in Ethiopia.”

This initiative is part of Accion’s 8-year partnership with the Mastercard Center for Inclusive Growth that supports the transformation of financial service providers, digital platforms, and fintechs, and aims to help 23 million people across 25 countries benefit from the digital economy.