Ethiopia has secured a €110 million loan, equivalent to about $130 million, from the European Investment Bank (EIB) to support a nationwide Rural Finance and Development Project, the Ministry of Finance announced on Facebook on Wednesday, February 4, 2026.
The project is designed to expand access to finance for micro and small enterprises across Ethiopia while promoting sustainable agricultural and economic activities in all regions.
Funds from the loan will be channeled through the Development Bank of Ethiopia to rural financial institutions, including microfinance institutions and cooperatives.
The initiative is also backed by several international partners: the International Fund for Agricultural Development (IFAD) will provide a $35.1 million grant and a $4.8 million loan, while the European Union will contribute a $10 million technical assistance grant and an additional $9.6 million grant to be implemented by IFAD, as seen in Ecofin Agency.
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“The signing of this historic financing marks a significant strengthening of the long-standing partnership between Ethiopia and the European Investment Bank,” the Ethiopian Ministry of Finance said.
World Bank data shows that nearly 80% of Ethiopia’s population lives in rural areas, where climate change and ongoing instability are increasingly threatening incomes and food security.
Alongside this project, the Ethiopian government has been rolling out structural reforms aimed at strengthening rural finance, including the launch of the country’s first Rural Finance Services Unit in June 2025 in partnership with international stakeholders.
The unit is intended to address systemic market barriers that limit access to rural credit and agricultural insurance for millions of smallholder farmers.
Ethiopia has worked for several years with the European Union and IFAD on financing initiatives in agribusiness, the bioeconomy, and rural development, as authorities continue efforts to improve access to finance for rural households and build stronger economic resilience across the countryside.
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Image Credit: The Ministry of Foreign Affairs of Ethiopia
