A credit risk guarantee facility designed to support ICT-based startups and small businesses in Ethiopia has reported a 100 percent repayment success rate, with no defaults recorded among the 37 firms that accessed financing. The program, which utilizes a $1 million guarantee fund, was established in 2023 through a partnership between the United Nations Development Programme (UNDP) and the Development Bank of Ethiopia.
According to the final report of the Innovation for Development (I4D) project, the initiative successfully lowered collateral barriers for participants by leveraging guarantee agreements with 13 different banks and microfinance institutions. The program operated in two distinct phases, with the Commercial Bank of Ethiopia joining as a participant during the second round to help expand access.
Program Performance Metrics (2023-2025)
| Metric |
Data |
| Total Loans Accessed |
ETB 85.7 Million |
| Companies Supported |
37 |
| Average Loan Size |
ETB 2.3 Million |
| Guarantee Fund Utilized |
$291,310 |
The report highlights that nine of the 37 supported firms were women-led. While the initial phase saw five companies secure ETB 12.3 million in loans, the second round significantly scaled the program, enabling 32 additional businesses to receive funding by the close of 2025. For those looking to invest in Ethiopia, such initiatives demonstrate the growing potential of the local startup ecosystem.
Following an assessment in April 2026, the Guarantee Fund Management Committee opted to extend the facility's operations through December 2026. The program currently holds a remaining balance of approximately $708,690. Revised operational terms have removed the cash collateral requirement for applicants and increased the maximum loan ceiling to ETB 4 million to accommodate a wider range of startups. Investors and entrepreneurs can track these developments through our latest business news coverage.
The initiative has now transitioned to the UNDP's Innovative Finance Lab, a collaborative effort with the National Bank of Ethiopia. The lab is set to oversee the fund for the remainder of the year and is expected to publish a final performance report by early 2027. Any residual funds remaining after December 2026 are slated for discussions with the Ministry of Finance to support broader national credit guarantee initiatives. For more detailed financial analysis, users can explore our data intelligence platform.
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