Financing the Future: How AI and Strategic Partnerships are Catalyzing MSME Lending and Agri-finance in Ethiopia

Nearly 300 senior decision-makers from government, banking, fintech, development partners, and industry associations, and entrepreneurs gathered convened for the 3rd Knowledge Series, hosted by Kifiya Financial Technology in partnership with the Mastercard Foundation, to explore how artificial intelligence (AI) can unlock new markets and business models for micro, small, and medium enterprises (MSMEs) in Ethiopia, Africa’s second most populous nation.

Held on Thursday, August 14, 2025, at the Hyatt Regency Hotel in Addis Ababa, under the theme “Leveraging AI Innovations to Unlock New Markets and New Models for the Financial Industry with a Focus on MSMEs and Agri-financing,” the event served as a platform for dialogue on how technology, innovation, and collaboration can generate opportunities that go beyond operational efficiency. Participants explored the potential of AI to overcome systemic constraints, broaden access to finance, and foster inclusive growth by making credit and financial services more accessible to underserved communities. It challenged Ethiopia’s financial sector to look beyond automation and AI not as a distant concept but as an immediate catalyst for inclusive financial products that reach those left behind particularly the country’s vast MSME sector. 

Munir Duri, founder and CEO of Kifiya Financial Technology, opened the event by framing the discussion around building a more inclusive economy where all citizens can participate and thrive. 

“New markets aren't built just by creating solutions, but by unleashing our own ingenuity,” he highlighted. “A nation’s future is secured by solving global problems.” He emphasized that innovation could expand opportunities for, MSMEs, and SHFs, driving shared prosperity.  New markets aren’t built just by creating solutions, but by unleashing our own ingenuity. A nation’s future is secured by solving global problems.” 

He drew a parallel with Professor Efosa Ojomo’s concept of market creation, which emphasizes that sustainable economic growth emerges from creating entirely new markets, rather than merely competing in existing ones.

The Knowledge Series is part of the Sustainable Access to Finance to Enable Entrepreneurship, (SAFEE) a co-created Program with the Mastercard Foundation that has been at the forefront of designing and deploying inclusive, AI-powered digital credit models. Since its launch, the SAFEE initiative has enabled credit access for over 358,000 MSMEs (99% women-led), Sustained more than 1 million jobs, and have Disbursed over 16 billion ETB in loans through AI-driven credit scoring systems, unlocking opportunity for individuals once excluded from traditional financial systems.  Building on the SAFEE experiences, The Knowledge Series aims to bring regulators, financial institutions, and innovators together to design inclusive, tech-driven financial systems, Showcase African-led AI and data science solutions in credit access, Feature leaders sharing how they navigate systemic constraints to drive innovation.

Mefthe Tadesse, Ethiopia Country Director of the Mastercard Foundation, described the event as a critical dialogue on leveraging AI and innovation to create new markets and financial models. “Our goal is to enable 30 million young people 70% women and 10% with disabilities to secure fulfilling jobs by 2030,” she stated. 

She stressed that achieving this requires a holistic approach combining improved access to finance, education, and skills, with digital technology to close opportunity gaps and foster entrepreneurship. Mefthe highlighted how MSMEs and SHFs remain the economy’s backbone but face persistent barriers to financial inclusion. 

Applied thoughtfully, AI can accelerate solutions by expanding collateral-free lending, enhancing financial services, and enabling partners to better address the realities of underserved communities. Yet, Mefthe emphasized, technology alone is insufficient. Its impact hinges on collaborative efforts to ensure innovation promotes inclusion and equity rather than widening divides. 

Building on this theme, Professor Efosa Ojomo of The Christensen Institute offered a more strategic framework for market creation and enablement. Introducing the concept of “nonconsumption,” he explained that many individuals and businesses are excluded not by choice but because existing services are too expensive, complex, or inaccessible. He underscored this with Ethiopia-specific data: the formal economy accounts for just 17% of total economic activity, while government annual expenditure per capita stands at roughly $92. Professor Ojomo argued that real prosperity arises from creating new markets that address the fundamental struggles of the non-consuming majority. This framework laid the foundation for practical discussions on how Ethiopian institutions are already applying AI to bridge these gaps. 

This theoretical insight found practical footing during the presentation “Managing Credit Risk in Emerging Markets, AI as a Catalyst” by Kwashie Agbitor of Accion Advisory. He highlighted AI-driven credit scoring as a primary mechanism for solving the nonconsumption problem in finance such as limited credit histories, slow manual processes, and human bias. By leveraging alternative data sources, including mobile money transactions and utility payments, the model constructs reliable borrower profiles often overlooked by traditional banks. This innovation lowers underwriting costs and significantly expands credit access for entrepreneurs. 

The conversation then shifted to a panel featuring leaders from Ethiopia's financial sector. Wegayehu G/Mariam, Vice President of Strategy, Planning, and Transformation at the Commercial Bank of Ethiopia (CBE), described how a major state-owned bank is adapting its long-standing model to embrace inclusive finance. Highlighting the CBE’s dedicated SME unit and strategic partnerships, he illustrated the necessity for large financial institutions to evolve in order to stay relevant in an increasingly dynamic market.

Complementing this, Melika Bedri, CEO of ZamZam Bank, presented a compelling case for rethinking banking’s role. She argued that serving disadvantaged populations is both a social responsibility and a significant business opportunity. By developing products tailored to non-consumers, banks unlock untapped, profitable markets. Melika stressed the importance of gender inclusion, noting that female entrepreneurs are often reliable clients. Both she and Wegayehu underscored the need for stronger collaboration among banks, government entities, and development partners to build a stronger, more inclusive financial ecosystem.

The panel discussion also featured Beza Ayalew, founder and CEO of BeSingularity, a company that focuses on outsourcing sales, training junior sales professionals, and connecting them with potential employers and gig opportunities. Representing the perspective of emerging entrepreneurs, she emphasized the importance of supporting young founders at the stage when they most need guidance, rather than only showing interest after they have already “made it.” 

Following the panel, the stage opened for a Q&A session. Participants raised questions around credit scoring and the use of available data, asking why lending is not extended based on the data already accessible in Ethiopia. Responding to this, Kifiya’s CEO, Munir Duri, explained the distinction between simply having data and the complex process of credit scoring. He noted that a typical credit scoring model requires 38 to 108 different datasets and leverages hundreds of millions of data points to build accurate assessments. “We have to differentiate between what it means to have data and what it means to perform credit scoring,” Munir stressed, highlighting the technological and analytical sophistication needed to translate raw data into reliable creditworthiness insights. 

The Third Knowledge Series concluded with closing remarks from Belete Molla (PhD), Minister of Innovation and Technology, who stressed that “sustainable change must be pulled from within,” driven by people solving problems they know intimately through local innovations that create new markets and unlock new demands. On technology’s role in inclusion, Dr. Belete underscored that AI and data-driven tools must “move beyond rigid credit scoring to see people for their potential” assessing effort, vision, and capability, not just collateral.

The gathering made it clear that the future of MSME finance in Ethiopia rests on purposeful innovation. Strategic partnerships like those between Kifiya and the Mastercard Foundation, combined with AI-driven credit tools, are beginning to dismantle traditional barriers that have excluded thousands of small businesses. This progress is not incremental but marks a fundamental shift positioning inclusive finance as a catalyst for unlocking the full growth potential of Ethiopia’s MSMEs. By harnessing technology, collaboration, and bold market-creation strategies, Ethiopia’s MSME sector is poised to thrive and drive sustainable, ground-up economic development.