One of the top private banks in Ethiopia, Dashen Bank, has teamed up with the Mastercard Centre for Inclusive Growth and the international NGO Accion, to provide small companies with digital financial services tailored to their financing requirements.
Through a variety of new products and an emphasis on women-owned businesses, Accion is helping Dashen Bank establish an innovation hub with the goal of extending digital banking services to MSMEs.
In Ethiopia, Dashen Bank has always led the way in launching cutting-edge digital banking services and solutions. It was among the first banks in the nation to introduce a digital wallet, which facilitates easy transactions for small business owners.
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The bank now hopes to create new solutions that are integrated into current supply chains for MSMEs in Ethiopia that still mostly conduct business in cash, have limited assets, and are therefore mainly invisible to large banks thanks to the new innovation hub being constructed with Accion.
Innovation hub to boost digital financial inclusion for businesses
One of the strategic pillars of the Bank’s sixth strategy plan, which aims to increase its ability to assist MSMEs, is the innovation hub. Dashen Bank has recently issued a tender to initiate the construction of this forward-looking facility. Through creative digital solutions, this action seeks to promote economic development and financial inclusion.
Backed by this new data and extensive research, the innovation hub will build solutions such as credit from their existing suppliers via embedded finance products, and non-financial tools, such as business management support.
The innovation hub represents another bold step by the bank toward transforming Ethiopia’s banking landscape, demonstrating its unwavering commitment to harnessing the power of technology to drive progress and support economic empowerment.
As part of its future roadmap, Dashen Bank will organize an innovation workshop for its leadership and staff, which will explore opportunities in cutting-edge technologies, including artificial intelligence, in collaboration with a globally recognized technology partner.
Dashen Bank expresses commitment to the partnership
Asfaw Alemu, Chief Executive Officer at Dashen Bank shared,“Despite their critical contribution to the country’s economic growth, small businesses, particularly those led by women, face significant financing challenges. This is largely due to high reliance on cash-based transactions leading to insufficient formal financial records of their business operations and women’s lack of ownership over assets to meet collateral requirements. Through this partnership, we seek to address these challenges, build our operational capacity, enhance our credit offerings to meet the needs of small business owners, and develop a range of digital products and value propositions to help them access the resources they need to grow their businesses successfully. This landmark project underscores our commitment to always staying one step ahead, further cementing our reputation as an industry leader in Ethiopia’s financial sector.”
According to Yohannes Million,Chief Digital and Information Officer at Dashen Bank,”Our innovation hub aims to serve as a catalyst for empowering MSMEs by providing them with tailored digital banking solutions. Based in a dedicated facility, it will drive change as a platform where technology and financial services intersect to fuel progress and improve operational efficiency for our customers.”
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Accion to help Dashen develop new products designed for MSMEs
Through strategic partnerships with those supply chains, Accion will help Dashen develop new products designed for MSMEs, using AI to crunch new types of data and develop new credit scoring models that are better suited to the realities of MSMEs, including those that are women-owned.
Raliat Sunmonu, Vice President, Middle East and Africa, Accion Advisory said, “Ethiopia is one of Africa’s fastest-growing economies, and small businesses play a vital role in propelling its growth. Through this collaboration with Dashen Bank – a leader in financial innovation – and other strategic partners we are helping build a more inclusive ecosystem for MSMEs in Ethiopia. Together, we can deploy artificial intelligence and other tech tools to help remove bias and other roadblocks faced by micro, small, and medium enterprises, especially those led by women.”
Mastercard expresses enthusiasm about the partnership
Subhashini Chandran, Senior Vice President of Social Impact for Asia Pacific, Europe, Middle East and Africa, Mastercard Center for Inclusive Growth said: “Ethiopia is at a pivotal point in its journey to drive economic growth through inclusive and relevant services for micro and small businesses. Digital financial services are a critical component of that journey. For the last decade, the Mastercard Center for Inclusive Growth has been working to advance financial inclusion around the world. We are excited to partner with Accion and Dashen Bank to develop inclusive financial services that can support the growth and resilience of small business owners in Ethiopia.”
This initiative is part of Accion’s 8-year partnership with the Mastercard Center for Inclusive Growth that supports the transformation of financial service providers, digital platforms, and fintechs, and aims to help 23 million people across 25 countries benefit from the digital economy.