Enhanced Financial Accessibility to MSMEs Instrumental in Realizing Inclusive Growth

Addis Ababa, May 23/2024 (ENA) Sufficient financial accessibility for Small and Medium Enterprises (MSMEs) is instrumental to realize the inclusive economic growth of the country at large, Minister of Industry Melaku Alebel said.

The Association of Ethiopian Capital Goods Finance was officially launched today with the aim to improve access to finance for Micro, Small and Medium Enterprises (MSMEs).

 

The launching ceremony of the association was attended by leaders of various financial institutions including from Development Bank of Ethiopia, National Bank of Ethiopia, Ministry of Industry and other pertinent financial institutions. 

Addressing the launching ceremony of the association, Minister of Industry Melaku said Micro, Small and Medium Enterprises (MSMEs) have a huge role for the inclusive economic growth of the country at large.

The association is believed to improve MSMEs’ access to critical machinery and equipment, by coordinating the previously fragmented capital goods financing landscape.

Accordingly, through the pooling of resources and curbing collateral requirements, the association will enable lenders to extend much needed lease financing to smaller enterprises that have historically struggled to secure such capital.

This coordinated approach will be instrumental in enabling thousands of small businesses to access the machinery needed to scale up their operations, it was learned.

Encouraging and supporting financial institutions like the Association of Ethiopian Capital Goods Finance will be instrumental to improve access to finance for MSMEs, the minister pointed out.

Acknowledging the financing constraints encountered by MSMEs, the Development Bank of Ethiopia in collaboration with five regional capital goods finance companies has introduced lease financing products.

Essentially, the Association of Ethiopian Capital Goods Finance has become instrumental to arrange lease financing and other options to provide business with an affordable alternative to acquire equipment and the financing gap.

More importantly, the establishment of the association is highly anticipated to deliver significant benefits for Ethiopia's vast number of Micro, Small and Medium Enterprises, considered as the backbone of Ethiopia’s manufacturing sector.