Addis Ababa, Ethiopia — Earlier today, Kifiya Financial Technology in partnership with the Mastercard Foundation and its knowledge partner International Finance Corporation kicked off a first of its kind knowledge seminar bringing together financial institutions, policymakers, and MSMEs to discuss how to make capital more accessible to entrepreneurs by addressing prohibitive collateral requirements. Kifiya Financial Technology is pioneering a unique approach to the challenge through its digital lending technology Qena, which connects businesses to credit without the need for collateral, leveraging new approaches to credit scoring.
Recent figures show that, Ethiopia has an estimated 800,000 MSMEs of which only about 130,000 have access to credit (70% micro-enterprises and 40% of SMEs), and the total financing gap is estimated to be approximately USD $4.2 billion (https://bit.ly/3Hd0qMh). The gap is driven by a variety of factors, including capital investment and machinery requirements, a general backlog of foreign currency, and much larger working capital requirements.
Speaking to the challenges facing MSMEs, Thomas Bekele said: "In the past, we worked with Micro Finance Institutions to purchase machinery for our business. As small business owners, we haven't had the chance to work with banks. That is mainly because we do not have a property that we can use as collateral to borrow money. Uncollateralized digital lending is a great opportunity to grow our business. Once digital lending products start providing loans, we plan to seize the opportunity and expand our business by opening an outlet and buying a vehicle for delivery."
Financial institutions often lack platforms that enable them to interface directly with MSMEs, understand their challenges, and co-create solutions. By bringing together leading industry experts, researchers, bank senior officials, entrepreneurs, regulators, policymakers, government, and other key stakeholders, the knowledge seminar is poised to accelerate digital lending solutions and enhance access to finance for MSMEs in Ethiopia.
"Ethiopia is embarking on transforming the financial sector and embracing digital first. Digital knowledge is at its centre. And everyone needs to partake in bridging the knowledge gap in the sector. This is the beginning of a knowledge series to convene experts to debate, share ideas, experiences, and lessons to provide digital financial services to small businesses and smallholder farmers," said Munir Duri, Kifiya Financial Technology CEO.
Ultimately, MSMEs are central to Ethiopia's economic growth—but a lack of access to capital constrains their growth. Reflecting on the opportunities presented by collateral-free digital lending, Samuel Adela, Country Head, Ethiopia at the Mastercard Foundation said: "The bottom line here is not just profit for businesses—it is an opportunity for Ethiopians, particularly young Ethiopians. This is about unlocking the potential of MSMEs to deliver critical products and services, fuel the economy, and create jobs that allow individuals to build dignified and fulfilling lives."
About Kifiya
Kifiya financial Technologies was established in 2010 and operational in 2013 with the vision to make transactions simple affordable, secure, and within reach through building integrated and scalable technology and distribution infrastructures that enable access to financial and non-financial services. Kifiya also built the capacity to develop innovative products and services that can bring value to consumers, corporate entities, and the government. Its technology focusing areas include e-commerce, Logistics, Payment & Distribution services, Digital Agricultural solutions, and Digital Lending services. Over the past five years, Kifiya has been developing AI-based credit scoring and digital lending platform (Qena), and appropriate products for the MSME sector to enable financial institutions to provide credit to individuals, micro, small and medium enterprises. The platform enables MSMEs, and individuals to apply and manage their credit through mobile or web and get responses promptly.
About the IFC
IFC is the largest global development institution focused on the private sector in developing countries. IFC, a member of the World Bank Group, advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by creating new markets, mobilizing other investors, and sharing expertise. In doing so, we create jobs and raise living standards, especially for the poor and vulnerable. Our work supports the World Bank Group's twin goals of ending extreme poverty and boosting shared prosperity. For more information, please visit: www.ifc.org
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
Media Contacts:
Kifiya Financial Technologies PLC
Lewam Assefa,Head Marketing, Qena
T: +251913 028610
Email: lassefa@qena.com.et
Mastercard Foundation
Simret Yasabu, Lead, Program Communications
T: +251 975 048876
Email: syasabu@mastercardfdn.org
