Dashen Bank Share CompanyStatus: Approved investment
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Who is our customer
Dashen Bank ("Dashen’’ or the "Bank") is the oldest and second largest privately owned bank in Ethiopia. Dashen is a universal bank, serving more than 3.9 million customers across the country, with over 800 branches and more than 10.000 members of staff. Having grown rapidly over the last few years, the bank’s portfolio is focused on the corporate and SME banking in the agriculture, trade and domestic services industries. They are also increasingly looking to grow their MSME and retail portfolio with new digital lending products.
What is our funding objective?
FMO provides the bank with a senior loan facility, of which USD10 million is committed and USD10 million is uncommitted. The bank is a new client for FMO with FMO’s facility providing much needed foreign currency for on-lending to the bank’s agriculture/exporting clients. The funding is used for purchasing of machinery and working capital facilities to enable the clients to increase their productivity and the outputs they are exporting, as well as to increase the number of small holder farmers that they are working with. FMO’s funding objective is in line with the regulations in Ethiopia, which requires foreign loans to local financial institutions to only be used for on-lending to foreign currency earning exporters.
Why do we fund this investment?
This is FMO's first direct loan to a financial institution in Ethiopia. Proposed facility provides an opportunity for FMO to support Dashen and Ethiopia in attracting Foreign Direct Investments and USD funding for a bank and sector that have been closed off from the international financial markets for many years. By investing in Dashen, FMO contributes to job creation, strengthening local communities & livelihoods and in supporting segments of the population (rural communities) that have difficulty in accessing formal financing.
What is the Environmental and Social categorization rationale?
Dashen Bank has been categorized as E&S risk "A" due to the exposure to high E&S risk within Dashen’s corporate loan portfolio in respect to the loan sizes, terms and sectors and the higher contextual risk associated with the country given the recent civil war. The bank is in full compliance with FMO's exclusion list and FMO will be supporting the bank through Technical Assistance to implement a full E&S Action Plan that ensures the bank is well equipped to manage the E&S risks in their portfolio. This includes putting in place an Environmental and Social Management System and implementing best practice E&S policies & procedures, in line with IFC PS 1 and IFC PS 2.
- Website customer/investment
- Financial Institutions
- Publication date
- Effective date
- Total FMO financing
- USD 10.00 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C)