Development Bank of Ethiopia Plans Restructuring and Wholesale Finance Framework

The Development Bank of Ethiopia (DBE) is preparing to restructure its operations and establish a comprehensive wholesale development finance framework with support from the World Bank. This initiative aims to modernize the bank's operations by shifting focus from direct project lending to channeling funding through other financial intermediaries. The proposed model includes credit guarantee and risk-sharing mechanisms designed to mitigate risks for participating lenders, thereby expanding credit access for small and medium-sized enterprises.

The project involves designing a new wholesale lending policy, operational manuals, and accreditation systems for participating institutions. It also integrates environmental and social risk management requirements and seeks to implement technical advisory programs to improve financial services for women entrepreneurs. By strengthening its role as an intermediary, the DBE aims to increase the reach of development finance to businesses that have historically faced collateral and institutional barriers to credit.