UNDP has signed a Letter of Intent with the National Bank of Ethiopia(NBE) to support the establishment of Capital Market Development Authority and Innovative Finance Lab.
In June 2021 the House of Peoples’ Representatives had passed a proclamation on capital markets. UNDP’s collaboration with the NBE will also support the promotion of innovative and inclusive access to finance in Ethiopia through the set-up of innovative finance lab.
Speaking at the signing ceremony, UNDP Ethiopia Resident Representative said, “UNDP believes capital market and innovative financing are critical driver of economic and social development and leads to job creation, economic growth and technological innovation.”
UNDP has already identified access to innovative and inclusive finance as one of the focus areas in its 2020-2025 Country Programme Document. UNDP has commissioned a study on innovative financing, and future areas of collaboration includes joint research and development, exploring innovative solutions and exchanges of information on best practices.
UNDP has in the past worked with financial institutions in Ethiopia such as Development Bank Ethiopia (DBE) and Commercial Bank of Ethiopia (CBE) on loan guarantee scheme and to disburse various financial packages to Medium, Small and Micro Enterprises (MSMEs) as response to COVID-19. UNDP’s partnership with the Federal Job Creation Commission and the CBE as well as the DBE has reached more than 14,000 MSMEs impacted by COVID. Between 2020-2021 nearly 200million birr has been provided to the MSMEs combating the impact of COVID.