IFC Access to Finance phase II IFC Access to Finance phase II The Access to Finance Component Phase 2 builds on the successes and learnings from Access to Finance Component Phase 1 Program to increase access to finance for under financed actors, including small and medium-sized enterprises (SMEs) and agri-value chain actors, with particular focus on smallholder farmers (SHFs), women and youth. The program aims to leverage the foundational work that has been undertaken to address both supply side (financial sector) and demand side (real sector) constraints. Supply side primarily though advisory service for activities such as product development, financer capacitation and financial technology innovation. Demand side (real sector) constraints through borrower literacy, (SMEs) and and capital market development.

The program has five pillars:

1)Financial Infrastructure

2)Agri supply chain and access to finance

3)MSME banking advisory support

4)Ethiopia capital markets development

5)Environmental, Social and Governance ESG

The program seeks to effect structural change and thereby sustainable and inclusive impact on access to finance leading to the expansion of economic opportunities, increased processing capabilities, increased jobs, private sector growth and ultimately impact on the economy at large. Access to Finance fas 2 bygger på framgångar och lärdomar från projektets första fas, som fokuserade på att öka tillgången till finansiering för underfinansierade grupper. Programmet har ett särskilt fokus på små och medelstora företag samt aktörer i Jordbruksvärdekedjan, speciellt kvinnor och kvinnoägda företag, dvs ”de underrepresenterade grupperna”. Programmet bygger vidare på det grundläggande arbetet som har lagts på att åtgärda hinder på utbudssidan (finanssektorn) och på efterfrågesidan (realsektorn). På utbudssidan genom rådgivning och aktiviteter som policyreform, produktutveckling, kapacitetsutveckling av bankerna och innovation kring digital finansiell teknologi. På efterfrågesidan (realsektorn) genom att stärka kompetenser hos låntagare och utvecklingen av kapitalmarknaden.

Programmet har 5 komponenter:

1)Financial Infrastructure

2)Agri supply chain and access to finance

3)MSME banking advisory support

4)Ethiopia capital markets development

5)Environmental, Social and Governance ESG

Programmet avser att genomföra strukturella förändringar och därmed bidra till en hållbar och inkluderande utveckling för tillgång till finansiering. Tillgång till finansiering förväntas leda till utökade ekonomiska möjligheter, ökad produktivitet, ökade arbetstillfällen och i slutändan ha en positiv inverkan på den privata sektorn och på ekonomin i stort. The MDI Access to Finance Phase second phase of the program aims to increase access to finance and thereby economic opportunities for the private sector at large with special focus on small- and medium-sized enterprises (SMEs); agri-value chain actors ranging from producers, producer organizations to agro-processors (with special focus on women and youth) and women owned businesses i.e. the underserved.  The program seeks to effect structural change and thereby sustainable impact on access to finance leading to the expansion of economic opportunities, increased processing capabilities, increases jobs and ultimately impact on the economy at large.

In particular, the program aims to:

*Strengthen and increase financial institutions utilization of the credit information system to enhance the creditworthiness of borrowers and promote the use of their credit histories as collateral complements and substitutes, thus reducing loan collateralization levels.

*Strengthen and increase financial institutions utilization of the MPSR and WRS as tools that would allow them to expand the range of bankable collateral to include movable assets like equipment, purchase orders, accounts receivable, livestock, and commodities, as they are more widely available to marginalized actors and women.

*Leverage digital financial solutions to overcome gaps in bank branch footprints and inefficiencies in loan administration processes.

*Provide hands-on support to financial institutions, including the provision of market analyses, risk appraisals, product design, process enhancement, and go-to-market strategies to boost their understanding and improve their perceptions of opportunities and risks in lending to the underserved via new inclusive financial products and technologies.

*Create and deliver structured financial literacy programs to marginalized actors, including SMEs and agri-value chain actors, with a particular focus on women, in target industries and value chains.

In addition, IFC will lay the foundation for good environmental, social and governance (ESG) practices in the financial and agribusiness sectors to enable a more diversified and resilient economy, and stronger and more sustainable local businesses, which boosts investments.