UNCDF in Ethiopia

Catalyzing resilience and inclusion

Launched in 2021, the Digital Finance for Resilience (DFS4Res) programme is a four‑year initiative supported by the European Union (EU) and the Organization of African, Caribbean and Pacific States (OACPS) and implemented by UNCDF across 11 countries in Africa, the Caribbean, and the Pacific. In Ethiopia, the programme works closely with government institutions, private sector actors, and civil society organizations to drive inclusive digital finance through targeted grants, strategic service procurement, and partnership facilitation.

Key activities include supporting the establishment of a digital finance industry association; working with partners to develop and roll out innovative distribution models; strengthening and piloting a digital supply chain financing solution for micro and small businesses, the rollout of a nationwide digital financial literacy survey to inform policy and product design; and the drafting of national digital financial literacy (DFL) guidelines.

Furthermore, to promote consumer protection and responsible use of digital financial services, UNCDF is supporting the Ministry of Technology and Innovation to conduct education and awareness campaigns on digital financial literacy.

With a direct investment of approximately USD 1.6 million, supplemented by technical assistance, the DFS4Res programme in Ethiopia has achieved notable results, including registering over 320,000 customers and 12,000 mobile money agents; onboarding and training 23,000 MSMEs; delivering in-person digital financial services training to more than 40,000 clients; and bringing together over 18 service providers to collaborate and strengthen the ecosystem.

Supporting financial service providers to increase financial inclusion for MSMEs in conflict-affected areas in northern Ethiopia

With €5 million in funding from the European Union, and in collaboration with the Ministry of Industry and Development Bank of Ethiopia, Deutsche Gesellschaft für Internationale Zusammenarbeit GIZ and Kreditanstalt für Wiederaufbau KfW, UNCDF is supporting financial institutions to improve the offering of digital financial services for MSMEs in conflict-affected areas, with a special focus on youth and women-owned MSMEs. UNCDF will partner with 12 financial service providers to expand agent networks, roll out innovative credit products, and deploy digital solutions tailored to the needs of MSMEs in conflict-affected areas. These efforts aim to improve access to capital, enabling MSMEs to recover, rebuild, and scale their operations in the aftermath of conflict. Ultimately, UNCDF’s efforts contribute to fostering sustainable economic recovery and strengthening long-term resilience in communities impacted by instability.

Last mile capital for inclusive growth in Ethiopia

In 2025, UNCDF launched the five-year FinWise Ethiopia Project (2025–2029) to unlock capital for MSMEs and support Ethiopia’s shift toward a manufacturing-driven economy. Of the country’s 2.29 million MSMEs, only 11 percent have access to finance. FinWise addresses this gap through blended finance instruments such as grants, loans, and guarantees combined with digital tools and business advisory to strengthen investment readiness.

By 2028, UNCDF aims to mobilize USD 20 million to reach 56,000 MSMEs, 50% women-led, while strengthening ecosystem actors and enabling policy reforms aligned with SDGs 5, 8, 9, and 17.

Key initiatives include:

1. a USD 2.08M Gates Foundation programme deploying grants and technical assistance to expand CICO networks and digital payments, alongside a USD 250,000 fintech accelerator targeting early-stage startups;
2. a USD 4.99M AIRADE initiative using grants and digital platforms (USD 2M in LOAs) to enable smallholder farmers, cooperatives, and agribusinesses to access inputs and financing;
3. USD 325,000 in technical assistance to strengthen National Bank of Ethiopia regulatory systems;
4. a USD 5.5M EU-funded DONE project providing loans and risk-sharing instruments to 12 financial service providers serving MSMEs in conflict-affected regions; and (5) the UPLIFT programme deploying loans and guarantees to poultry value chain actors.

Together, these interventions expand inclusive finance and economic resilience nationwide.

Furthermore, in partnership with UNIDO and FAO, and with support from the UN Joint SDG Fund, UNCDF is implementing the Unlocking Poultry by Leveraging Investments for Transformation (UPLIFT) project. This initiative focuses on strengthening the poultry value chain by promoting sustainable food systems, enhancing economic resilience, and creating employment opportunities. UNCDF’s role includes deploying loans and guarantees to improve access to finance for actors across the value chain, enabling increased investment, productivity, and long-term sector growth.

Through strengthening ecosystem actors, scaling sustainable financial solutions, and advancing policy advocacy, FinWise contributes to Ethiopia’s inclusive economic transformation and directly supports the achievement of SDGs 5, 8, 9, and 17.