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AfDB will provide a guarantee of up to 100 percent to confirming banks for the non-payment risk arising from the confirmation of Letters of Credit and similar trade finance instruments issued by Dashen Bank. Dashen Bank is the oldest and second-largest privately owned bank in Ethiopia
The African Development Bank Group (AfDB) has approved a USD 40 million risk cover to support Dashen Bank’s trade finance activities. The facility, known as a transaction guarantee facility, is meant to support Small and Medium Enterprises (SMEs) and local corporates’ import and export trade finance.
In it, AfDB will provide a guarantee of up to 100 percent to confirming banks for the non-payment risk arising from the confirmation of Letters of Credit and similar trade finance instruments issued by Dashen Bank. Dashen Bank is the oldest and second-largest privately owned bank in Ethiopia.
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In August 2023, FMO (Dutch Entrepreneurial Development Bank), British International Investment, and the Development Finance Institution (DFI) committed US$20 million to Dashen Bank to support agriculture and foreign exchange. It has also signed a separate deal with International Finance Corporation, a member of the World Bank Group, to strengthen its credit facilities to MSMEs. In its last results, Dashen Bank reported ETB 6.6 billion in profits. It has taken a lead in the recent decision to float the Birr, which led to a rapid devaluation of the currency.
