🚜🌾👨‍🌾 Nadir to Nafir

Welcome to the 68th edition of ፍራንክ Digest!

Your weekly brief on all things Finance and Investing. Quick, enjoyable reads for busy professionals in 5 minutes or less.

Here’s what’s coming your way:

• 🌱 A Bold Roadmap: Finance Meets Agriculture

• 🪞 The Fintech Apps Ethiopia Wished It Had

• 🖼️ Big Picture

Thanks for reading!

Bridging The Finance Gap

Economy

We glossed over National Agri-Finance Implementation Roadmap (NAFIR) before but now we have the full-blown T on hand. For those unfamiliar, we got you covered.

It’s a collaboration between the National Bank of Ethiopia (NBE) and the Ministry of Agriculture (MoA) to finally give farmers the VIP financial access they’ve deserved all along. The program is set to last five years from 2025 to 2030.

📝 Here’s the Context

Despite agriculture being the heavy hitter accounting for 32% of GDP, 64% of all jobs, and 79% of export revenues, credit trickles more like a glucose IV drip to the sector. Banks only direct about 8% of their total lending to the sector and microfinance institutions (MFI) just 18%.

Demand for agricultural credit is estimated at a massive ETB 2.5 trillion per year (USD 15 billion), but in 2024 the total disbursed was just ETB 52 billion (or ETB 125 billion if you include fertilizer credit from CBE)—a measly 2% (or at best 5%) of demand…ጉድ ነው

NAFIR wants to avail ETB 881 billion/year (USD 6 billion) to the sector by 2030.

Why the yawning gap? Financial Institutions (FI) such as banks and MFIs struggle because:

• They lack specialized agri-finance know-how and products tailored to farming’s seasonal quirks.

• Appraisals take forever. Anywhere between weeks to months, like watching grass grow.

• There’s little coordination to manage risks appropriately.

🍾 NAFIR’s Secret Sauce

Pillar 1- National Agri-Finance Accelerator (NAFA)

• Pooling financial resources from government, development partners and private sources

• FIs can use the pool to refinance their loans by selling a portion of it to NAFA which releases funds to originate new loans.

• Allows banks to purchase loans from other FIs whose loan value exceeds the NBE requirement and so have a surplus.

• Agri-loan securitization to be developed via the Ethiopian Securities Exchange (ESX) to facilitate access to funds from the capital markets.

Pillar 2- Farmer Access to Streamlined Financial Services (FAST)

• Imagine a farmer's own “credit card” that’s digital, linked to their unique FAST ID, National ID with data on their land plot, crop mix or livestock. National ID has already integrated with the Ministry of Agriculture’s land registry database, which covers 18 million farmers, and growing.

• Payments, loans, sales and insurance all rolled into one neat digital wallet. Loan repayments and insurance premiums get directly deducted from sales. No more drowning in paperwork!

• Centrally developed credit-scoring algorithm jointly developed by the FIs under NBE supervision. Calculate each farmer’s seasonal credit allowance according to the farmer’s need. Compliance process is minimized!

Pillar 3- Agri-Finance Centre of Excellence (CoE)

• This will be the brain and nerve center of NAFIR. Boosting financial literacy for all stakeholders, building FI capacity (including interest-free banking), forging better institutional links and tackling agricultural risk.

🎯 Opportunities Ahead

🏦 Banks and MFIs

Banks have historically tiptoed around agriculture lending but NAFIR changes the ጥቅም ጉዳት equation:

1. Risk-sharing & refinancing via NAFA

   • Banks can lend to farmers, then refinance (sell) that loan to NAFA, freeing up liquidity to lend more. NAFA even proposes it may absorb the first loss (up to a certain percentage) on loans to high-priority or underserved segments, reducing exposure.

2. Regulatory incentives & prestige

   • A strong agri-loan portfolio can become a badge of national economic alignment (plus it won’t hurt during regulatory reviews).

   • There's also room to earn income by selling surplus agri-loans to other FIs who haven’t met lending thresholds. Essentially a secondary market for farm loans.

3. Securitization via the Ethiopian Securities Exchange (ESX)

   • Banks can package agri-loans into investable products and raise funds through capital markets — creating more liquidity and lowering their reliance on deposits.

4. Access to ready-made borrower pipelines

   • With validated borrowers through contract farming or cooperatives, the risk of lending goes down, plus less time chasing people and paperwork.

Bottom line: Banks get capital relief, better risk cushions, and access to a growing, structured agri-credit market.

🛡️ Insurance Companies

Agricultural insurance has long been underdeveloped — but NAFIR wants to scale it up fast.

1. Bundled insurance = built-in customer base

   • Under the FAST system, every agri-loan comes bundled with crop/livestock insurance. That’s automatic policy issuance on every loan.

2. Data-rich underwriting

   • With access to farmer IDs, geolocation, plot size, crop mix and historical yield, insurers can finally price premiums intelligently instead of flying blind.

Bottom line: A nearly untapped market of 18+ million farmers, with the infrastructure to scale. For insurance firms, this is like discovering money in an old jacket.

📱 Digital Platforms

Whether fintech, agri-tech, mobile money or platform cooperatives, digital players are central to NAFIR’s rollout.

1. Distribution partners for banks

   • Banks will rely on ag-fintechs like Kifiya and Lersha, mobile money, cooperatives and even produce off-takers to reach last-mile borrowers.

   • That means digital platforms become the preferred channel for credit disbursement and repayment.

2. Wallets and payment systems

   • The FAST system includes digital wallets linked to each farmer’s Fayda ID and phone number — perfect territory for fintechs to manage transactions, savings, and loan repayments.

3. Credit scoring algorithms

   • Platforms that help develop or feed into the centralized credit scoring models stand to build recurring service revenues and proprietary insights.

4. Last-mile input delivery & aggregation

   • Integration with cooperatives, warehouse operators or produce off-takers gives agtech (marriage of the words ‘agriculture’ and ‘technology’ 💑) platforms access to supply chains: input sales, mechanization services and even output marketing.

Bottom line: Digital platforms go from being optional add-ons to core financial infrastructure. There's scope to monetize everything from KYC to repayments to value chain data.

🖼️ Big Picture

• Credit access: Moves Ethiopia from a pitiful 2–5% credit fulfillment toward the Ministry of Agriculture’s ETB 881 billion/year (USD 6 billion) goal by 2030. Still not reaching current demand of ETB 2.5 trillion (USD 16 billion) but it’s better than where we are now.

• Modernization & inclusion: Integrates digital tools, value-addition chains and export-ready infrastructure to reshape rural finance.

• Coordination: Moves away from fragmented, siloed support toward cohesive, inclusive ecosystems.

If NAFIR isn’t just a fancy policy paper and is properly implemented it could be a bold pivot to upgrade Ethiopia’s agricultural sector.

ፍራንክ Picks 

🚶🏽 Event: Pan African Artificial Intelligence Conference [Oct 05, 2025]

🗞️ In the news: CBE botches its sexy makeover

♟️ Innovation: Ras, your new Ethiopian AI assistant on the block

In a Parallel World: The Fintech Apps of Ethiopia

Fintech

The fairytale marriage of ቴክኖሎጂ and finance has been celebrated for decades. And the love story continues to this day.

It may not be Disney quality, flying carpets and handsome beasts and all but it sure is guaranteed to make you feel like genies are real and that Mufasa never actually fell off the hill ⛰️.

(Excuse us, we were on a nostalgic journey ahead of writing this very important article)

Digital finance has been on the rise and apps like Telebirr, eQub, Apollo and more have contributed greatly to this big change.

But there is one aspect that many are not talking about: the fintech apps they wished they had.

Wish lists are permitted, right? So here is ours (The Ethiopian version):

1. Spend Management 💸

A Telegram bot (AI agent) that accepts your expense receipts - ማኪያቶ and ራይድ and what not - on a daily basis, analyses them and gives you curated advice on a more responsible spending.

🫡 Potential Name: Yibka

⭐ Stand out feature: Categorized spending view with a weekly snapshot presented to you 

2. Online Bank 🏦

Imagine downloading an app and in a few clicks, you have a bank account! Need to transfer funds? Online. Need to create a business account? Online? ATM machine ate your card? Request a new one online.

🫡 Potential Name: Worefa Yelem Bank

⭐ Stand out feature: Set up in minutes

3. Peer-to-Peer Lending

If banks take your money and make more money from you then why not use that same money instead to give money to your friend (Try saying that three times fast 😉). With a peer-to-peer lending, you can get some relief trough ‘micro’ loans originated trough other people’s funds, skipping the cumbersome lending process at financial institutions

🫡 Potential Name: Ayzoh Gobez

⭐ Stand out feature: Offer a counter to the interest rate you are willing to pay

4. Alternative Credit Scoring 💸

Like most third world countries, Ethiopians know more about their aunties secret real estate war chest more than their own financial health. An alternative Credit scoring app would give an insight on how to better gain financial well-being by analyzing bank transactions, psychometric and behavioral data.

🫡 Potential Name: Wederase

⭐ Stand out feature: A personalized score rating that pits you against others

5. A Corporate Account Management App 🤵‍♂️

If you’re a business owner, you know the headache of operating your account digitally. This app will let you manage your own corporate card, seamlessly pull up statements and transfer funds directly to your suppliers, employees and tax office.

🫡 Potential Name: Businesse be Kise

⭐ Stand out feature: Automated expense approvals!

🖼️ Big Picture

Where did the time go? 5 years ago, transferring money from one bank to a different one seemed like witchcraft. It’s a testament to the push made by regulators and operators a like.

Finance plays a big part in our lives, whether we’re spending money, putting some to the side to invest, managing our companies funds or helping out a friend in need trough lending.

Fintech has played a significant role over the past few years with Ethiopia seeing its fair share of apps.

Yet, deep down, if you read the room, there is a need for a more curated pool of apps that targets current shortcomings of the Ethiopian financial system.

The biggest challenge? Coming up with clever names 😉 

Thanks for sticking with us, ፍራንክ family! Keep those wallets smart and your inbox open - we’ll be sliding in next week!