Putting Local Wealth to Work in Ethiopia

A lack of access to credit for farmers and other small businesses is widespread in most developing countries. Yet in Ethiopia, and in many other low-income countries, a majority of the population farms or resides in rural areas. Although they are central to these countries’ economic advancement, small farms and agribusinesses often face a devastating impediment to growth: a lack of access to financing. Banks are hesitant to lend to sectors they perceive as being too risky. Initiatives such as USAID risk sharing agreements with local banks may help put local weath at work locally.