Barriers to Agricultural Finance in Ethiopia

Agricultural SMEs in Ethiopia face barriers to finance working capital and equipment for their activities, and moreover to grow and to create jobs. The Government of Ethiopia has formulated a dedicated and ambitious program of economic policy reform to modernize the economy and ease the capital constraints. However, Ethiopia’s financial sector still has one of the highest collateral requirements in the world.

This two-stage study comprises a review of over 100 papers and a survey of 61 Ethiopian small and medium enterprises in agricultural value chains with a purpose to foster a conversation between stakeholders of agricultural SME-finance for affirming proven approaches and identifying new ones to overcome agricultural finance barriers.