Ethiopia’s private commercial banks, Dashen Bank, announced on Thursday a comprehensive technical assistance programme with European Investment Bank’s (EIB) backing. The programme aims to improve the bank’s ability to promote sustainable financing practices and manage climate-related risks.
Dashen Bank’s CEO, Ato Asfaw Alemu, highlighted in his introductory remarks that banks now play a role that extends beyond conventional lending and deposit mobilisation. He stated that in order for banks to actively participate in climate finance, they must incorporate environmental risks into their decision-making procedures.
Additionally, Ato Asfaw emphasised the need for contemporary banks to spur green investments that promote environmental sustainability and long-term economic growth.
Commitment to increase funding for climate-resilient projects
In partnership with the European Investment Bank, he reaffirmed Dashen Bank’s commitment to increasing funding for climate-resilient, inclusive, and green projects, especially in fields like sustainable agriculture, renewable energy, and environmentally friendly infrastructure.
Investment Officer Thomas Lugez of the EIB Global Directorate-International Partners said he was confident Dashen Bank would be a trustworthy partner in Ethiopia’s adoption of climate risk integration and green financing systems. He said that this technical assistance programme would help the EIB and Dashen Bank work together more effectively and align their efforts in the future.
Dashen Bank understands that tackling climate change and its possible effects on its operations, clients, and the larger Ethiopian economy is vital. This program shows how dedicated the bank is to integrating climate resilience and environmental sustainability in its main business operations.
The initiative’s goal
Identifying, evaluating, and managing climate-related risks and opportunities in the Dashen Bank’s lending portfolio is the programme’s goal. The objective is also to provide the bank’s teams with the skills and resources they need to successfully assist the shift to a green economy.
Dashen Bank’s progress towards responsible banking has reached a major turning point with this collaboration with the European Investment Bank. By lowering greenhouse gas emissions, advancing inclusive finance, and increasing access to marginalised communities, it reaffirms the Bank’s commitment to taking the lead in assisting Ethiopia’s long-term, low-emission, and inclusive green growth strategies.
Dashen Bank surpasses one billion birr in loan disbursements
In other news, Dashen Bank revealed on Monday that it had surpassed 1 billion birr in loan disbursements on MESMER, which caters to micro, small, and medium-sized businesses. Only MESMER loans are included in this figure; other loan disbursements in a comparable category are not.
Dashen Bank will carry on with this initiative in a more planned and coordinated way, contacting additional recipients across Ethiopia.
Dashen Bank disburses loans to farmers
Dashen Bank partners with agritech startup Lersha to empower farmers by giving them access to credit, skill development, and equitable market opportunities in Ethiopia’s Arsi Zone. The initiative receives technical support from the International Finance Corporation.
166 smallholder farmers have already benefited from the pilot project, which is presently taking place in four woredas of the West Arsi Zone.
The project has given the farmers a total loan of 3.78 million birr without the need for collateral. It’s impressive that these loans were paid back in full in just nine months.
The loan size is anticipated to rise from 27,560 birr to 47,000 birr as part of the scale-up project, which intends to reach 3,500 farmers in 10 woredas in the Oromia and Sidama regions.