United Bank Scaling SME Finance

Small and Medium Enterprises (SMEs), particularly those in manufacturing, agro-processing, construction and tourism are considered key drivers of the envisioned economic transformation in Ethiopia with the potential to create jobs and income. However, various studies indicate that SMEs engaged in these primary sectors are constrained by lack of access to finance. To address the financing constraints faced by SMEs the World Bank Small and Medium Enterprise Finance Project (SMEFP) provides a credit line for lease financing and working capital. EP plays an instrumental role in providing technical assistance (TA) to financial institutions participating in the SME finance project. In line with that EP provides TA to banks to downscale their products and services to meet the needs of the SME market.

United Bank is one of the banks who received the TA provided by EP, where some staff from the head office and selected five pilot branches were trained on cash flow based SME appraisal system in September 2017. The bank also received a close follow up and coaching from EP during the three-month pilot period, between June to August 2018. A five-day refresher training was also carried out in the last week of July 2018 further strengthening the banks in-house capacity to train their staff going forward.

United Bank, capitalizing on the SME finance technical assistance delivered by EP,  took the initiative to train all its branches to scale up beyond the pilot branches.  To carry this out the bank identified five central locations in Addis Ababa, Adama, Mekele, Hawasa and Bahirdar to reach their 219 branches throughout the country to scale up SME financing.

A hundred branches in Addis Ababa were the first to receive the training during September 24th- October 10th, 2018. In line with that branch managers and loan officers of the 100 Addis Ababa branches were trained in three sessions lasting two days each. According to the bank management, this will continue further to reach the outlying branches through the other training centres mentioned above.

Three more banks, Enat Bank, Awash Bank and Berhan Bank are currently going through the pilot stage, and Enat Bank will be the next expected to scale up. This highlights the remarkable commitment demonstrated by United bank management, to implement the SME finance program, making them the first SME finance project participating financial institution to scale up beyond pilot branches. EP is proud to acknowledge United Bank’s commitment and performance and encourage them to keep up the good work.