The Best Business Loans in Ethiopia

Compare the best options on the market and choose the one which best adapts to your day to day needs.

Further Below: Our Guide to Business Loans in Ethiopia, Everything you need to know.

Oromia International Bank

  • Get a loan of up to ETB 500,000
  • Competitive interest rate of 7.5% p.a
  • Offer loans for various purposes
  • Offers both short and long-term loans
  • Has excellent financing conditions
  • Offers a loan tenure of 5 years
  • Provides loans to foreigners
  • Available to applicants with stable income
  • Provides both secured and unsecured loans

Commercial Bank of Ethiopia 

  • Loan limits depend on applicants’ income
  • Attractive interest rate of 8.3% p.a
  • Offers a long repayment term of 15 years
  • Eligible only to clients with stable income
  • Loans available for a variety of purposes
  • Long-term loans have more benefits
  • Offers loans to aliens
  • Simple eligibility criteria
  • Facilitates online application

Awash Bank

  • Loan limit depends on the borrowers’ income level
  • Friendly interest rate of up to 7.6% p.a
  • Top financing conditions
  • Flexible repayment period of up to 10 years
  • Offers unlimited loan purpose
  • Has online loan application and banking
  • Eligible to clients with income only
  • Financing conditions improve with timely repayments

Business Loans in Ethiopia, All You Need To Know:

Get a hang of everything about business loans in Ethiopia from the available offers. FUNDGECKO guides you on how to analyze their conditions, and how to compare them to get one that best addresses your needs and peculiarities. 

[UPDATE] What economic measures has the Government implemented for companies through covid-19?

The Ethiopian curated policies and measures to help businesses and companies that were directly affected by the adversities of Covid-19. The government’s policies traversed the social, health, and economic facets to support all firms operating in the country.

  • The Central Bank of Ethiopia has approved 15 billion birrs to increase liquidy in the private banks. This widened the loan market as banks could offer loans to potential borrowers affected by the pandemic. This allocation was also used to facilitate debt restructuring.
  • Tax submitted to the government and all other contributions submission deadlines were waived for 3 months.
  • The central bank authorized the reduction of the lending interest rates for 6 months
  • The government allocated funds to fund SMEs and private entities to ensure they survive through the pandemic into the foreseeable future
  • The Central Bank also authorized 33 billion to help commercial banks earn liquidity
  • The government launched subsidy programs that supported different aspects of the economy that had shut down due to the government measures against Covid-19 such as sports and entertainment, culture, and transport, among others.

For more information about the government policies regarding Covid-19, visit the following 

Distinguishing types of company profiles

Before we apply for finance for our company, several things come into play. The nature of our company is one important component. The type of loan we can get depends on the features of our company.

what types of businesses are there?


  • Entrepreneurs: This kind of company has not yet taken off. Entrepreneur is currently looking for funding to carry out their ambitions even though they just have a vague idea of the type of firm they want to launch. Only minor loans are available to this type of firm.
  • Start-ups: This puts entrepreneurs one step ahead. Although the firm is active, it is still quite new and undeveloped. The company is now losing a lot of money and requires more funding than it is bringing in. As a result, it is not eligible for large loans.
  • Consolidated companies: As implied by its name, this business is financially sound enough to make large loans. The business generates more profits than losses and has run consistently over the years.
  • Large companies: these are the largest forms of business. They have a large scale of operation; national or international and qualify for huge loans (in millions of Euros). Examples of such companies include Century Garments PLC and The Central Bank of Ethiopia among others.


  • As legal entities: the phrase is used to describe people who are operating on their dime and are looking for a loan to finance their venture. Whether they have a start-up or a consolidated business, their degree of income affects their business profile. But the loans they can get are designed for just one individual.
  • As natural persons: these are people who have a form of income that’s different from that of an employee. Hence, they access personal loans to finance their business projects.

Characteristics of business loans

Depending on the nature of your company’s profile, one form of business loan could differ significantly from another or have certain special features. When you’re looking for finance, you should generally keep an eye out for certain qualities of business loans:

  1. Cost. This is the first factor to always consider when looking for a business loan. The cost of the loan should be friendly, with the interest rates low enough to allow your business to benefit from the loan. However, note that loans that have incredibly low interest rates are often gimmicky and might require you to pay more commissions later.
  2. Amount. There is nothing like a standard amount of business loans because your financial situation might require a unique amount of money. Hence, be conscious of the amount you’re taking out and leverage it to ensure that it improves your business.
  3. Purpose. Different financial products address different purposes, whether you’re looking forward to expanding your business, making more investments, having liquidity, collecting invoices, or paying your suppliers.
  4. Linkage. Especially in banks, financing always comes with related products such as insurance, business accounts, or other products of mandatory recruitment.
  5. Term. The amount of time you have to repay a loan varies with the type of loan you’re taking out. The bigger the loan the longer the repayment time.
  6. Grace period. This refers to a period during which your lender allows you to go without making your monthly repayments. This happens in the initial stages of the loan during which the borrower can make the most gains from the loan.
  7. Guarantee. This comes in when the lender requires you to present property that acts as a guarantee for your loan repayment. Small loans will always skip this step.
  8. Speed. It’s important to consider how fast the lender will release the funds to your account. Normally, small loans will have faster hiring than big loans.
  9. Repayment. The lender may have specifications about how they require you to repay the loan: either making monthly installments or repaying the loan plus the commissions at the end of the term.

Where to get business loans

In the last ten years, a variety of financial businesses have emerged thanks to developments in financial technology. As a result, new financial suppliers have curated various financial services to establish their brands. 

Below are the current types of business loan providers:

  1. Banks: These are the most established lenders. To be eligible for financing, a certain set of criteria must be met, such as seniority and corporate solvency.
  2. Companies and private capital lenders: These businesses have made it possible for borrowers to apply for loans online, completing the entire procedure without having to visit the lender’s offices. Their terms are great, frequently better than banks’.
  3. Alternative financing platforms for crowdlending: These are the kinds of platforms that give the borrower and private investors a direct connection. The decision to invest in or not invest in our business initiative is up to the investor. Once they contribute to our projects, they join our company and receive compensation in the form of revenues. After 48 hours of processing these loans, we can determine whether the investor is interested in our idea or not.

Understanding our business’s financial situation and needs will make it easy for us to know which form of financing suits us perfectly.

Business loan conditions

Before you get a business loan in Ethiopia, you’ll face a few must-meet requirements as set by the government. Every single entity will look out for these requirements before granting you the funds:

  • National registration: To be regarded as a legal entity in Ethiopia, your company needs to have a national registry. The registration demonstrates that your company is legally permitted to operate and that you are abiding by all business-related laws and regulations in Ethiopia.
  • Annual income: You will need to provide documents showing your annual income for previous years. With this information, the lender will evaluate your financial abilities and solvency. You also don’t want to commit to a loan that will cripple your business.
  • The seniority of the company: While different lenders have different preferences for the age of the company, most of them will provide financing if a business is at least 12 months old. That doesn’t rubbish the fact that there are lenders who provide loans to younger businesses and start-ups.
  • Not appearing on the defaulters’ files: Your business should not have any outstanding loans, otherwise, you may not access good financing. Take time to clear the name out of the files before looking for loans.

Different entities may add additional, particular requirements that change the aforementioned conditions. Therefore, spend time reading the terms and guidelines provided by the lender.

Documents needed to get funding

Application timeframes for business loans are typically lengthier than those for other loan categories. A borrower will have to present some documents to prove their eligibility, including;

  • VAT returns from the previous year and the current year.
  • Income tax return.
  • Bank statement (if in another bank).
  • An updated balance sheet of the company’s turnover.
  • Proof of payment of Corporate Tax.

You may deliver these documents online, visit the office, or send them via mail or courier.

Other forms of financing for companies

  1. Business credit lines

We receive a specific sum of money from business credit lines, which we will later pay back. They are different from loans nevertheless because we only have to pay back the portion of the principal that we have already spent. We can keep the entire sum and spend it as needed thanks to credit lines. This kind of credit is crucial when we have modest, ongoing financial needs but don’t need to continually ask for loans.

  1. Factoring

This sort of financing is specifically made to aid SMEs or self-employed people who may want money to pay supplier invoices. The lender negotiates with the supplier on our behalf and demands that we pay back the total amount they spent plus interest, either in full or in equal monthly payments. 

  1. P2B or crowdlending loans

These are online forums that link company owners and individual investors. Private investors are free to decide whether or not to invest in your company concept. We will receive varying sums of money from various platforms, which run under various rules.

  1. Confirming

These loans are made specifically for suppliers that need money to keep their cash flow stable after collecting and fulfilling orders. The borrower will be obliged to pay back the money they borrowed either in full or in installments after the orders are delivered.

  1. Loans with mortgage guarantee

We can only use these financial products if we can offer real estate as a guarantee of payment. A maximum proportion of the property’s appraised worth is represented by the sum we receive. To obtain such loans, one must be patient and go through the drawn-out appraisal procedures.

Products to invest in our company

  1. Equity crowdfunding

These platforms have recently dominated the financial markets mainly to their simple application processes and quick payouts. These platforms also give the lender, who may be a private investor or a professional, an unlimited selection of projects from which to choose. On the other hand, the borrower receives some funding without being under any obligation to make payments because the investor joins the company.

  1. Business Angels

These platforms operate the same way as equity crowdfunding. Unlike equity crowdfunding where the lender is an individual, here, managers of the Business Angels meet and agree as a group on which business to invest in. These platforms mostly provide financing to big projects.

  1. 3F (Friends, Family, Fools)

These are simply Family, Friends, and Fools who provide financing for our business. Agreements between the lender and borrower are not official and may not require many formalities.

Aid for the financing of companies

  1. Capitalization of unemployment

This entails obtaining all employment perks available to us and using the money to launch a business. This kind of funding is only accessible to self-employed people who want to launch a firm.

  1. Subsidies: National, regional or local

The Ethiopian government has funded many subsidies and grants for business start-ups, especially in low regions. 

  1. Crowdfunding

A borrower can discover sponsors on these networks who are enthusiastic about their company endeavors. The platform allows borrowers to promote their ideas so that potential investors may view them and get in touch with them. Keep in mind that the investor will compensate you more if they invest more in your idea.

About this page, our methodology

What this page is for:  We’re here to assist you to find the finance that best suits your requirements. As a result of our extensive study, we offer high-quality, simple-to-understand information regarding consumer loans and what you must do to get the best deal available.

Source: The information regarding consumer credits in Ethiopia and their regulations has been drawn from The Central Bank of Ethiopia, Government websites among other reference portals.

Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.

About Us: FUDGECKO is a website that serves as a comparison tool for products related to personal finance and home economics. We provide you with quality information that helps you find an offer that is most compatible with your wants and quirks in addition to comparing the terms of the available offers.Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.

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