Dashen Bank becomes the first bank to break the foreign loans intermediation glass ceiling following the financial backing of two well established European financiers.
The instrumental directive, ‘Foreign currency intermediation by banks’ which was first issued in 2020 by the National Bank of Ethiopia (NBE), and which was later amended in December 2021 to allow banks to play an intermediary role to affiliate foreign currency financing for foreign currency earning oriented businesses, has now finally come to life.
Despite the directive having a positive aim of expanding foreign currency availability, it however did not take off as expected up until recently when one of the biggest and oldest private banks, Dashen sealed a deal with two foreign financiers to access USD 40 million under the directive.
During the announcement on Tuesday, August 29 Dashen disclosed that it had reached an agreement with British International Investment (BII), the UK’s Development Finance Institution (DFI) and impact investor, and FMO, the Dutch entrepreneurial development bank to access the foreign currency as a bridge for those who want to accelerate their international business.
As per the joint commitment of the two partners, they will be able to affiliate up to USD 20 million each to Dashen.
Through this commitment, BII and FMO become the first foreign financial institutions to provide long-term funding to Ethiopia’s financial services sector under the new intermediation directive for banks issued by the National Bank of Ethiopia in 2021.
“The loan will help to drive agricultural exports and provide access to much needed foreign exchange within Ethiopia,” the statement issued read.
By providing much needed capital for the expansion of growing businesses, the development finance-backed facility enables Dashen to provide USD-denominated loans to cover the costs of importing machinery supporting farmers towards increased productivity in areas such as harvesting, logistics, and processing as well as in boosting exports earnings.
xxx“We are pleased to have achieved this historic milestone. With the exemplary co-lending of BII and FMO, Dashen Bank is breaking the ice in the materialization of the directive for foreign loans intermediation,” Asfaw Alemu, President of Dashen Bank said, adding, “The forex denominated financing will enable Dashen Bank, one of the top four private sector banks in Ethiopia serving over 5 million customers with a footprint of 800 plus branches, to support export-oriented agribusinesses.”
“On top of the badly needed foreign currency, the lessons learnt through the rigorous due diligence process will help us set the bar high when it comes to sustainable financing in Ethiopia,” he added.
Stephen Priestley, Managing Director and Head of Financial Services at BII said that his firm has been a pioneer investor in Ethiopia for the past 50 years, “Our partnership with FMO and Dashen Bank forms part of a mobilization plan that creates untapped opportunities for DFI and commercial investment into Ethiopia’s financial services sector for years to come.”
Marnix Monsfort, Director of the Financial Institutions Department at FMO said, “By providing much needed foreign currency for on-lending to the bank’s agriculture/exporting clients, FMO aims to contribute to job creation and financial inclusion of rural communities.”
According to Darren Welch, British Ambassador to Ethiopia, this first long-term, international investment into Ethiopia’s banking sector is the latest achievement in the country’s economic reform journey.
As per the, ‘Foreign Currency Intermediation by Banks Directives No. SBB/82/2021 that was replaced by the directive no. SBB/77/2020, article 4 sub article, three 1 and 2, a grace period for principal payment of at least six months and a repayment period of at least two years was included.
“Eligible businesses that shall access the foreign currency are those who engage on foreign currency generating activities, and importing of priority goods,” the NBE rules read.
Dashen is well known as a trailblazer and pioneer on digital financial schemes and for the roll out of foreign oriented payment systems in Ethiopia.

The National Bank of Ethiopia (NBE) takes a bold step to keep the vehicle insurance premium rate at a very low level. Following this move, insurance companies will no longer reduce the premium payment.
As it is well known, the premiums in the Ethiopian vehicle insurance market have been declining from time to time, with insurance companies incurring huge losses due to vehicle insurance compensation costs. During this time, the existence of each company has been challenged, which then led the Ethiopian Insurers Association to hire a vehicle insurance rate calculator (Actuary) based on the representation given by its members.
As experts close to the case express, “The implementation of the minimum premium rate has been highly anticipated.”
In a bid to calm the situation, NBE has now set the floor price that cannot be reduced any more. The floor rate does however not include the administrative cost and profit margin that insurance companies should include in their premiums, so each company is required to submit its own premium rate within one month, including its related costs.
Accordingly, the Ethiopian Insurance Association expressed its happiness towards the initiative taken by NBE, “The National Bank has taken appropriate steps to help Ethiopian insurance companies grow out of losses and develop themselves through healthy competition from the unfair market competition that was going out of control based on price reduction and not service quality and efficiency.”
“Since this action has not been taken to meet the current premium rate estimation points; as this type of activity requires daily monitoring and professional in-depth inspection, the association expresses its belief that the bank will make an adjustment of the premium rate based on the current price by hiring an appropriate professional as soon as possible,” the association expressed its hope to the central bank.

The national multi-commodity exchange in the country, the Ethiopia Commodity Exchange (ECX), sets its eyes on going online this coming trading season.
The 15 year old trading facility which commenced its operation through an outcry system has been going through huge waves of transformation, having transitioned to electronic trading in 2015 at its centers.
According to the trading floor which is now automated with the support of the Artificial Intelligence Institute; the new scheme will allow traders to conduct their exchanges online rather than the routine hustle of visiting the trading floor branches.
ECX stated that the online trading will be applicable through its exclusive app that will accommodate trading members on its system.
The information that Capital obtained from ECX showed that the new system will be available in the coming trading season as an alternative to the current electronic trade.
“In the current electronic trading scheme, traders come to the trading centers to access the system, while the new scheme will allow traders to trade from anywhere,” Dawit Mura, Corporate Communications, Senior Specialist at ECX, disclosed.
As Dawit further indicated, “In the current scheme, traders had limited space, but this will not be an issue when the online trading system is introduced in the near future.”
The statement that ECX sent to Capital cited that, “Any required information about the commodity, and relevant trading issue, will be available very soon to which traders can take their appropriate decision.”
“Traders will soon order their trading without any interference and without visits to the ECX trading branches,” it added.
At the moment, traders still come to trading centers to get services. With the new system traders are now going to fulfill any precondition without visiting the trading centers.
ECX disclosed that prior to the introduction of the new scheme, relevant training will be provided for its players.
ECX is an agricultural commodity trading hub that mainly supports farmers to trade their commodities at competitive rates. The scheme also provides frequent and relevant market information.

Huawei Ethiopia organized the ICT competition winners award ceremony with the objectives of recognizing the 7th Huawei ICT Competition winner students and motivating others. Huawei ICT Competition for 2023–2024 is also launched.
Huawei Technologies has been running the 7th Huawei ICT Competition 2023 in collaboration with the Ethiopian Ministry of Education, which has attracted over 1500 university students.
Dr. Solomon Abraha, CEO of Higher Education, Governance, and Administration at the Ministry of Education awarded 18 students at the ceremony. Nine global final competition winners received Huawei tablets, while the rest of the regional competition winners received Huawei armbands.
Dr. Solomon, stated during the prize ceremony that the “Huawei ICT Competition gives Ethiopian students international exposure.” ICT competitions, according to the CEO, can be a terrific method for university students to develop their ICT knowledge and skills while also gaining useful experience and exposure. He also noted that the ministry of education prioritizes the improvement of ICT education. Dr. Solomon appreciates Huawei for hosting such an international competition. “If you are a university student interested in ICT, I encourage you to consider participating in an ICT competition,” he said adding, “it is an excellent opportunity to improve your talents, obtain significant experience, and earn worldwide visibility.”
Liming Ye, Huawei Ethiopia’s PR director, also stated that ICT competitions typically cover a wide range of ICT topics, so participants will have the opportunity to learn about new technologies and concepts. They will also get hands-on experience with these technologies, which will help them develop their practical skills.
He also claimed that an ICT competition may provide students with essential experience in problem-solving, teamwork, confidence building, improved exposure, and project management. They will also learn how to successfully express their ideas, which is a crucial ability for any professional. He also stated that Huawei, as an IT company, should continue to make similar efforts in order to maintain its social commitment.
Students from the competition stated that it provided them with new experiences and that visiting Huawei’s headquarters, which is a technology center, inspired them with new motivation. Tibebu Kaleb, one of the students who travelled to China for the global competition, noted in the event that the contest provided him with the opportunity to compete with students from other countries, and he also claimed that he received a job offer from Huawei Ethiopia.