Addis Ababa, Ethiopia — August 3, 2021 – The Mastercard Foundation Micro and Small Enterprise (MSE) Resilience Facility has impacted more than 10,000 businesses and saved over 50,000 jobs since its inception, according to mid-term results released earlier today.
The USD 24.8 million Facility was created in 2020 through a partnership between the Mastercard Foundation, the FDRE Jobs Creation Commission of Ethiopia, and First Consult, to support MSEs and start-ups in Ethiopia during the COVID-19 pandemic by providing them with soft loans and grants in partnership with Awash Bank and Dashen Bank.
As a result of the economic disruption brought about by the pandemic, accessing finance has become increasingly challenging for enterprises, especially for micro and small enterprises that are primarily informal.
The Facility has helped to ensure that MSEs remain solvent, retain their employees, and can create increasingly innovative work opportunities in the wake of COVID-19. The creation of the Mastercard Foundation MSE Resilience Facility is aligned to the Foundation's Young Africa Works strategy, which aims to enable 30 million young people in Africa, particularly young women, to access dignified and fulfilling work over the next 10 years. The Foundation's work in Ethiopia will contribute to a third of this goal, by enabling 10 million young Ethiopians to access dignified and fulfilling work.
Of the 10,000 businesses supported through the facility, 2000 are informal businesses that have collectively received 24,000,000 ETB in grants. 80% of these informal businesses are women-owned, and collectively these businesses have saved 4,440 jobs. The Facility has also provided soft loans to 8,000 formal businesses, 5,000 of which are micro enterprises, bringing the total number of jobs saved to over 50,000.
"I produce concrete flower pots and used to sell them with plants from my home. This support helped me to rent a place where I can produce, store raw materials, and display my products. I also used the funds to buy raw materials. I now have the potential to grow and expand my business," said Senait Girma, a loan recipient.
H.E Nigussu Tilahun, Commissioner of the FDRE Jobs Creation Commission said, "COVID 19 pandemic had an adverse effect in the Labor Market especially on MSEs that are a backbone to the economy. In 2012 EFY only more that 300,000 jobs have been lost because of the pandemic. This drags the efforts of creating sustainable jobs for all and adds to the burden of unemployment. Such interventions will avert further impacts of the pandemic on MSEs by prevent loss of jobs and fills the critical gap of availing finances to stay afloat in the market."
"This Facility gave us an opportunity to expand our customer base in the MSE market. I believe this experience will inform our future product development and our go-to-market approach in the segment," said Ephrem Bogale, Director of Personal & SME Banking Directorate at Awash Bank.
"This facility has created clarity around easier access to finance for MSEs. Access to finance from banks has always been extremely challenging. This shift in access is due to the provision of relaxed collateral requirements, a lower interest rate and an extended repayment period. The Facility has attracted many SMEs who were previously unbanked and never channeled their transactions though us," said Dereje Bekele, Senior Manager of MSME Banking at Dashen Bank.
"We at First Consult are proud of this achievement in expanding Access to Finance for 10,000 small businesses to cope with the economic shock of COVID-19. This result came as a result of innovation, teamwork and goodwill, which we hope to use as a foundation to scale-up to more businesses across the country," Noted Nebil Kellow, Project Director, FirstConsult
"The pandemic created not just a health crisis, but an economic crisis, with small and medium businesses on the front lines. In 2020, we launched the Mastercard Foundation COVID-19 Recovery and Resilience program in part to enable struggling businesses to access urgently-needed resources. It is deeply encouraging and hopeful to see the ways in which our partners' support has protected jobs, as well as enabled innovation and resilience," said Samuel Yalew Adela, Country Head, Ethiopia, at the Mastercard Foundation.
About the Jobs Creation Commission
The Jobs Creation Commission (JCC) of the Federal Democratic Republic of Ethiopia is established under the Office of the Prime Minister to advance the government's goal around employment and job creation. JCC is uniquely positioned to lead, govern and coordinate the jobs creation agenda at the national and subnational levels. It is committed to guide the investment of government, the private sector and development partners to high-growth sectors through policy analysis and innovation; and to align skills development with market needs. Directly overseen by the Prime Minister's office, JCC is mandated to Coordinate, Govern and Monitor all Government and Non-Government efforts in creating jobs. With a mission to drive job creation through innovation and action, the Commission aims to facilitate the creation of 3 million jobs by 2020, 14 million by 2025 and 20 million by 2030. The commission has facilitated and supported the creation of 2.4 million jobs to date. For more information on the JCC, please visit: www.jobscommission.gov.et
About the Mastercard Foundation
The Mastercard Foundation works with visionary organizations to enable young people in Africa and in Indigenous communities in Canada to access dignified and fulfilling work. It is one of the largest, private foundations in the world with a mission to advance learning and promote financial inclusion to create an inclusive and equitable world. The Foundation was created by Mastercard in 2006 as an independent organization with its own Board of Directors and management. For more information on the Foundation, please visit: www.mastercardfdn.org
About First Consult
First Consult is a leading Ethiopian institution specialized in economic development in Ethiopia. With a focus on private sector, financial sector, and human capital development since 2005, First Consult has built and worked with over 500 partnerships that span the private sector, government, and development community. By supporting and mobilizing strong local institutions with highly capable individuals, the institution strives to solve the most-critical development challenges of our time. The core focus on youth development and women's economic empowerment is central to the mission of First Consult, which is to realize inclusive and sustainable development that benefits all.
Job Creation Commission
Tewedaj Eshetu Dadi , Communication and Public Relations Advisor
Telephone : +251 913 00 33 81
Email : email@example.com
Bealem Amdisa, MSEs Covid Resilience Facility – Project Manager
Telephone: +251 114 401 473
Simret Yasabu, Lead, Program Communications
Telephone: +251 975 048876