Ethiopia: AfDB Approves $50m Trade Finance Guarantee to Boost SMEs, Local Corporates Via Awash Bank

3 July 2025
Addis Standard (Addis Ababa)

Addis Abeba — The Board of Directors of the African Development Bank Group has approved a $50 million Trade Finance Transaction Guarantee Facility to support trade finance operations at Ethiopia's Awash Bank S.C.

In a statement sent to Addis Standard, AfDB said the facility allows the African Development Bank to provide up to 100% guarantees to international confirming banks against the non-payment risk associated with Letters of Credit and similar trade instruments issued by Awash Bank. It aims to ease access to import trade finance for small and medium-sized enterprises (SMEs) and local corporates in Ethiopia, while also bolstering intra-African trade and contributing to the implementation of the African Continental Free Trade Area (AfCFTA).

"Supporting trade in Africa is a key priority at the African Development Bank," said Lamin Drammeh, the Bank's Head of Trade Finance. "Trade finance is an important driver of economic growth and is critical for cross-border trade, particularly in emerging markets. We are delighted to work with Awash, a strong partner with deep knowledge and networks in Ethiopia."

Awash Bank CEO Tsehay Shiferaw welcomed the decision, saying the guarantee facility will alleviate the burden of arranging cash collateral with correspondent banks and improve the bank's liquidity. "It will enable us to support more trade clients and strengthen our relationships with international and African confirming banks," he said, adding that Awash looks forward to deepening its collaboration with the African Development Bank and partners.

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On Tuesday this week, Awash Bank has announced a pre-tax, unaudited profit of over 22 billion birr for the 2024/25 fiscal year.

The bank reported a total income of 64 billion birr, marking a 77% increase compared to the previous fiscal year. It also disclosed that its total deposits reached 332 billion birr during the same period. Of this, interest-free banking services accounted for 37.3 billion birr, representing 11.24% of the total deposit portfolio.

Read the original article on Addis Standard.

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