Dashen Bank Partners with Accion and Mastercard to Boost Digital Banking for Small Businesses in Ethiopia
Dashen Bank, one of Ethiopia’s largest private banks, has announced a strategic partnership with global nonprofit Accion and the Mastercard Center for Inclusive Growth. The collaboration aims to enhance digital financial services for micro, small, and medium enterprises (MSMEs), with a particular focus on women-owned businesses.
Bridging Ethiopia’s MSME Financing Gap
Ethiopia has nearly two million MSMEs, which are crucial to the country’s economy. However, only 6% of microenterprises and 1.9% of small enterprises have access to formal credit, leaving a financing gap estimated at $4.2 billion. This lack of access to financial services is exacerbated by high unemployment, low incomes, and limited financial literacy.
Additionally, financial inclusion remains gender-skewed, with only 39% of Ethiopian women owning an account at a financial institution, compared to 55% of men. This disparity limits their participation in the digital economy and restricts business growth.
Dashen Bank’s Digital Innovation Hub
Dashen Bank has a history of pioneering digital financial products in Ethiopia, being among the first to introduce a digital wallet for seamless transactions. Now, with Accion’s support, the bank is setting up a dedicated innovation hub to accelerate MSMEs’ integration into the digital financial ecosystem.
The hub will focus on:
- Developing new financial products for MSMEs that operate primarily in cash.
- Using AI-powered credit scoring models to assess business viability beyond traditional collateral-based methods.
- Embedding digital finance within supply chains, ensuring businesses can access credit from their existing suppliers.
- Providing business management tools to enhance operational efficiency.
This initiative aligns with Dashen Bank’s sixth strategic plan, which emphasizes financial inclusion and economic empowerment through technological advancements.
Key Stakeholder Perspectives
Asfaw Alemu, CEO of Dashen Bank, highlighted the importance of addressing MSME financing challenges, particularly for women-led businesses. “Small businesses are the backbone of Ethiopia’s economy, yet many remain underserved due to their reliance on cash transactions and lack of formal financial records. This partnership will help us build innovative credit offerings and digital solutions tailored to their needs.”
Yohannes Million, Chief Digital and Information Officer at Dashen Bank, noted, “Our innovation hub will serve as a catalyst for empowering MSMEs with tailored digital banking solutions. By integrating technology with financial services, we aim to enhance their operational efficiency and long-term success.”
Accion will play a crucial role in leveraging AI and advanced data analytics to develop financial products that better reflect MSMEs’ realities. Raliat Sunmonu, Vice President for Middle East and Africa at Accion, stated, “By removing bias and leveraging AI-driven credit models, we can support small businesses—especially those led by women—ensuring they thrive in Ethiopia’s rapidly growing economy.”
Mastercard’s involvement reinforces the project’s long-term vision. Subhashini Chandran, Senior Vice President of Social Impact for Asia Pacific, Europe, Middle East, and Africa at Mastercard Center for Inclusive Growth, emphasized, “For the past decade, Mastercard has worked to drive financial inclusion globally. Ethiopia is at a turning point, and digital financial services will be key to unlocking growth opportunities for micro and small businesses.”
Building the Future of Financial Inclusion
Dashen Bank has already issued a tender for constructing the innovation hub, marking a significant step toward transforming Ethiopia’s financial sector. As part of its roadmap, the bank plans to host an innovation workshop for its leadership and staff, exploring cutting-edge technologies like artificial intelligence in collaboration with global tech partners.
This initiative is part of Accion’s ongoing partnership with Mastercard, which aims to support 23 million people across 25 countries by equipping financial institutions and fintechs with digital solutions.
Conclusion
By investing in technology-driven financial solutions, Dashen Bank, Accion, and Mastercard are paving the way for greater economic empowerment in Ethiopia. Their collaboration not only enhances financial accessibility for MSMEs but also fosters a more inclusive and resilient economy.
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