FMO and the Cooperative bank of Oromia (Coopbank) today announce the signing of a USD 10 million NASIRA loan portfolio guarantee. The guarantee will enable Coopbank to expand its funding to agricultural, youth, and women-owned MSMEs, targeting a client group typically underserved by banks.
Funded by the European Commission, NASIRAis one of FMO’s most innovative programs, encouraging local banks to extend their funding to small entrepreneurs through a risk-sharing arrangement whereby the Nasira guarantee covers the bank for potential credit losses on the underlying portfolio. In doing so, FMO’s NASIRA guarantee will often encourage banks to lend to clients that are typically perceived risky, such as micro and small entrepreneurs, including women and young people. The guarantee with Coopbank will be the first NASIRA guarantee in Ethiopia and is highly impactful given the very low financial inclusion rates for MSMEs - according to the UNDP only 6 percent of the countries’ 1.5 million MSMEs have access to finance.
Coopbank is a new client of FMO and one of the largest banks in Ethiopia. The bank started its operations in 2004 with a focus on the agricultural sector and cooperatives. It has since expanded into a universal bank and currently operates through more than 756 branches with about 13.3 million customers across the country and 80 percent of the branches in outlying or rural areas. In addition, the bank launched the sector’s first uncollateralized digital lending app and alternative banking channels (mobile money and agency networks). It is also one of the only banks in the country to be actively lending to MSMEs and the agriculture sector and employs about 90 agronomists to provide capacity-building and advisory support to its clients.
Mr. Deribie Asfaw, CEO of Coopbank: "MSMEs are central to our operations at Coopbank. We have gone the extra mile to integrate MSMEs through digital solutions alongside our traditional financial services. This partnership with FMO marks a new chapter in the Ethiopian banking landscape and will significantly boost our efforts to provide credit to the underserved MSMEs."
Huib-Jan de Ruijter, co-chief investment officer at FMO: “We are very pleased to support Coopbank in serving small entrepreneurs and further developing this segment within the bank through the Nasira Guarantee. We view Coopbank as an innovative partner and highly appreciate the bank for being one of the few in the country actively lending to MSMEs, cooperatives, and individual farmers.’’
Roland Kobia, Ambassador of the European Union to Ethiopia: "The EU continues its work in Ethiopia to support micro, small and medium-sized enterprises (MSMEs), the backbone of the economy, to help Ethiopians on the path to recovery and reconstruction. We are happy to partner with The Netherlands in a Team Europe spirit to enable an Ethiopian commercial bank (Coopbank) to provide more loans to MSMEs, particularly in a key sector like agriculture, through European guarantees. We are grateful for Dutch FMO’s work in bringing this innovative NASIRA risk-sharing programme to Ethiopia, implementing the Global Gateway in Ethiopia.’’
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About Nasira
Launched in August 2020, NASIRA is a collaborative effort supported by the European Commission and the Dutch government. To date, it has facilitated 17 transactions with financial institutions across Central Europe, the Middle East, and Africa, amounting to a total of USD 371 million. For more information, please visit www.fmo.nl/nasira
About Coopbank
Cooperative Bank of Oromia, one of Ethiopia's largest banks, has been operational for over 19 years. Founded and primarily owned by cooperatives, the bank plays a crucial role in supporting agriculture and MSMEs by providing a variety of banking solutions. Renowned for its innovative products, Coopbank has attracted 13.3 million account holders and established a network of over 750 branches nationwide. With eco-friendly initiatives like Eco Branches—repurposed shipping containers turned into branches in rural areas, currently numbering 75—the bank has significantly contributed to financial inclusion efforts. Notably, Coopbank introduced Ethiopia's first-ever uncollateralized digital financial services, advancing an impressive ETB 5 billion to over 200,000 MSMEs within two years, entirely digitally and without collateral. These pioneering approaches have positioned Coopbank as one of the fastest-growing banks in the country.
About European Fund for Sustainable Development Plus
The European Fund for Sustainable Development Plus (EFSD+), successor of the EFSD, is part of the EU’s investment framework for external action. Offering a variety of risk-sharing instruments of up to €40 billion, the EFSD+ aims to mobilize up to €135 billion of public and private financing to help partner countries bridge the investment gap and achieve the Sustainable Development Goals (SDGs). In particular, the EFSD+ is the main financial tool to mobilize investments under Global Gateway – the EU strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.
