Addis Ababa, May 23, 2024 (FBC) – The Association of Ethiopian Capital Goods Finance was officially launched today with the aim to improve access to finance for Micro, Small and Medium Enterprises (SMEs).
The association is believed to improve SMEs’ access to critical machinery and equipment, by coordinating the previously fragmented capital goods financing landscape, it was revealed.
Accordingly, through the pooling of resources and curbing collateral requirements, the association will enable lenders to extend much needed lease financing to smaller enterprises that have historically struggled to secure such capital, due to collateral requirements.
This coordinated approach will be instrumental in enabling thousands of small businesses to access the machinery needed to scale up their operations.
Addressing the launching ceremony of the association, Minister of Industry Melaku Alebel said Micro, Small and Medium Enterprises (SMEs) have huge role for the inclusive economic growth of the country at large.
Encouraging and supporting financial institutions like the Association of Ethiopian Capital Goods Finance will be instrumental to improve access to finance for SMEs, he pointed out.
Established in February 2022, the Association of Ethiopian Capital Goods Finance was developed with technical assistance from the BRIDGES program, a partnership between the MasterCard Foundation and First Consult, as reported by ENA.
The establishment of the association is poised to deliver significant benefits for Ethiopia’s vast number of SMEs, which form the backbone of the country’s manufacturing sector, it was learned.