The Development Bank of Ethiopia (DBE) is preparing to disburse a 31 million euro concessional loan package to micro, small and medium enterprises operating in conflict affected areas of the country.

The financing facility is supported by a 31 million euro grant provided by the European Union and the German Development Bank, KfW, to establish a low interest credit line for eligible businesses.

DBE Director of MSMEs and Green Economy Projects Tefera Befekadu said the loans will be offered under favorable interest rate arrangements to support the recovery and expansion of affected enterprises.

According to Tefera, the financing will initially be distributed through four selected commercial banks and one microfinance institution to facilitate access to the funds.

The credit line will target businesses operating in the Afar, Amhara and Tigray regions. Eligible enterprises will include those engaged in manufacturing, services, trade, construction and agro processing.

Businesses established or led by women and young people will receive priority under the financing program.

DBE held a Post Conflict MSMEs Recovery and Inclusion Baseline Validation Workshop at its headquarters to establish the program’s implementation framework. The workshop was financed by the European Union and KfW.

The bank signed an agreement with its development partners in May 2026 to provide concessional financing to businesses affected by conflicts in different parts of the country.

DBE Vice President for External Funds and Wholesale Financing Aida Erkihun said the bank has also been providing capacity building programs, financial support and technical assistance to enterprises.

She said previous interventions had helped improve access to finance, strengthen operational capacity and support economic growth among small and medium sized businesses.

DBE is placing particular emphasis on rehabilitating and revitalizing enterprises located in conflict affected areas.

Aida said the recovery program aims to develop resilient businesses capable of contributing to inclusive economic growth, employment creation and sustainable development.

She also called for close cooperation among financial institutions, development partners, government bodies and other stakeholders to ensure the successful implementation of the program.

Source: Ethiopian News Agency