Mastercard Foundation and Kifiya Partner on $100 Million Program to Unlock Digital Credit for Ethiopian MSMEs

The Mastercard Foundation and Kifiya Financial Technology (Kifiya) have joined forces to launch a groundbreaking $100 million program called SAFEE (Sustainable Access to Finance to Enable Entrepreneurship). This initiative aims to revolutionize access to credit for Ethiopia's micro, small, and medium enterprises (MSMEs).

Building upon the success of a pilot program that empowered over 148,000 MSMEs to access uncollateralized working capital within a year, SAFEE seeks to significantly expand financial inclusion in Ethiopia. The program will unlock US$300 million from partner banks, enabling over 477,800 enterprises to access essential digital credit products.

“Our partnership with the Mastercard Foundation will unlock a range of uncollateralized financial products specifically designed to meet the needs of MSMEs,” said Munir Duri, Founder and CEO of Kifiya. These products include digital working capital, invoice financing, and buy-now-pay-later options. “SAFEE is designed to act as a catalyst, transforming the financial sector towards a system where uncollateralized digital credit becomes the standard for MSMEs,” Duri added.

Key features of SAFEE include:

  • Eliminating collateral requirements: Businesses can now access loans without the burden of traditional collateral, making it easier for them to secure funding.
  • Digital access: Entrepreneurs can conveniently apply for and manage loans through their mobile phones, streamlining the loan application and management process.
  • Focus on underserved groups: The program prioritizes empowering women, persons with disabilities, refugees, and those previously excluded from financial services, promoting greater financial inclusion across Ethiopia.
  • Promoting financial technology: SAFEE encourages the adoption of data-driven solutions like AI credit scoring. This not only streamlines loan processes for businesses but also reduces the cost of managing small-value loans for banks.

Expected impact:

The SAFEE program is expected to have a significant impact on Ethiopia’s economy. Over 477,800 MSMEs are expected to gain access to credit, potentially creating an estimated 2.18 million jobs, with 80% targeted towards young women. Additionally, the program is expected to increase financial inclusion for millions of Ethiopians who were previously excluded from traditional banking services.

“Through collaborative efforts and innovative programs like SAFEE, we aim to create an ecosystem where MSMEs can leverage the power of digital lending to reach their full potential and build sustainable livelihoods,” said Samuel Yalew Adela, Mastercard Foundation Country Director for Ethiopia.

This program represents a significant step towards financial inclusion in Ethiopia. By removing traditional barriers and promoting digital solutions, SAFEE paves the way for a more empowered and thriving entrepreneurial landscape.

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