Ethiopian banks sign agreement to finance small businesses of marginalized people

The signing of the MoU in Addis Ababa between the inter-congregational consortium supported by the GSF, represented by Fr Petos Berga (on the right) and the bank Elebat Solution. Photo by Giovanni Culmone / Gsf (Giovanni Culmone Gsf)

By Alessandro Di Bussolo – Addis Ababa, Ethiopia

Jul 8 2023

A network of religious congregations in Ethiopia supported by the Global Solidarity Fund signs an agreement with two local banks to provide microcredit to internally displaced persons, returning migrants, and refugees, to help them start their own businesses, as part of a three-year project sponsored by the Ethiopian Ministry of Labour & Skills and the MasterCard Foundation.

The Global Solidarity Fund’s pilot project in Addis Ababa, launched at the end of 2020, in collaboration with a consortium of women’s and men’s religious congregations, coordinated by the Archdiocese, is succeeding in getting many internally displaced persons, ‘returning’ migrants and refugees from other African countries into work. Not only because they are employed by companies collaborating in the project in the Ethiopian capital, but also because they have started their own micro-enterprises.

The inter-congregational network recently signed an agreement with two national banks, Hibret Bank and Elebat Solutions, to support them in starting up and growing their businesses.

Banks involved in the Tila project, supported by government and Mastercard

Supervised by the Ethiopian Ministry of Labour and Skills, the Memorandum of Understanding foresees the implementation of an innovative financial inclusion project for migrants and vulnerable people living in Addis Ababa. The project will provide microlending services to organised groups of beneficiaries.

The two national banks are part of a consortium to implement the innovative Tila project, a three-year inclusive scheme launched in 2021 which aims to support 42,000 vulnerable people, including women in rural Ethiopia, internally displaced persons, refugees, homeless youths and people with disabilities.

The project is a joint venture between the Ethiopian Ministry of Labour & Skills and the MasterCard Foundation, implemented by five local implementers.

Don Berga: Tila provides guarantees to obtain financing

Signing the consortium’s agreement with the Elebat digital bank at the St Michael’s centre, which houses the offices of the Socio-Pastoral Commission of the Archdiocese of Addis Ababa, were the commission’s head, Fr Petros Berga, and Mulatua Teshome, chief operation officer of Elebat Management and Technology Solution, in the presence of the heads of the congregations involved in the project.

The digital bank is included in the implementation of the Tila project. As Fr Berga explained, thanks to the support of local banks such as Elebat and Hebret, Tila helps project beneficiaries “who cannot provide guarantees to a bank, for example, to obtain financing for their business” by providing these bank guarantees for them.

Bank manager: this will change the lives of many Ethiopians

“Here in Ethiopia, many, far too many people, don’t have a job,” Mulatua Teshome told us, “and programmes like the one we have initiated with this memorandum, will be able to eradicate, at least in part, this unemployment. They will change the lives of many people”.

The Elebat manager emphasised that, in addition to funding from banks like hers, vulnerable people who want to open their own micro-enterprises will receive specific training and managerial support from the inter-congregational consortium.

“This signing is an important occasion, because we are expanding our network with other entities,” commented Father Berga, “. And this is thanks to the Tila project, which acts as an intermediary between the banks and the beneficiaries”. – Vatican News