April, 2015

WEDP partner-MFIs began lending in 2014. This

report analyzes that portfolio of 1722 loans and
notes the trends.

The Missing Middle

WEDP loans target urban, female business owners
within the missing middle. Ethiopias missing
middle can be defined as businesses requesting
loans between 100,000 1,000,000 ETB (Ethiopian
Birr).

Large

Loans > 1M ETB

Missing
Middle
Loans < 100k
Micro

At 233,000 ETB, the average WEDP loan does

indeed serve this missing middle (Fig. 1), though
it falls within the bottom of the pyramid, leaving a
gap on the high end.
Figure 1. Average WEDP Loan Size as of April, 2015

Most WEDP businesses are mature, with an

average age of 2.9 years. Given the loan sizes, this
makes a certain sense. More mature businesses are
generally more capable of and in greater need of
larger loans.
However, 66% of WEDP borrowers are new to the
MFI. It would appear that WEDP loans are opening
up a new market for participating MFIs. Before
WEDP, the average individual loan available from
participating MFIs was 19,241 Birr, compared to
todays WEDP average loan size: 233,000.
For repeat borrowers, there was an 837% average
increase in loan size, possibly indicating that these
microfinance borrowers were dramatically
underserved by previously existing loan sizes, but
had no other borrowing options.
Eighty three percent of WEDP loan disbursements
to date have gone to the service and trade sectors
(Figure 2).
Figure 2. Percent of Disbursements (Birr) by Sector

% Loan Disbursements by Sector

(Volume)
Agriculture
3%

Constructi
on
1%

Avg Loan Size by Sector (ETB)

Manufact
uring
13%

300,000
250,000
200,000
150,000

Trade
49%

100,000
50,000
-00

Service
34%

Other
0%

Collateral requirements were a key barrier to

Ethiopian women accessing credit. Most MFIs
require homes as collateral, and for women this
can be a substantial roadblock. To this end, WEDP
encouraged MFIs to experiment with alternate
forms of collateral (fig. 3).
Figure 3. Collateral Pledged for WEDP Loans, April, 2015

Types of Collateral Utilized

Other
46%

WEDP partners also provided training to 2575

clients. 80% of participants rated the training as
excellent, 19% as good, and 1% as average.

Our MFI Partners

House
54%

WEDP began with eight MFI partners, who have

disbursed most of their funds received. Four
additional MFIs were added in 2015.
Figure 5. Funds Received from the WEDP Credit Line and Disbursed

46% of the collateral pledged was other than

personal residences. However, collateral coverage
averaged 188%. Why? You cant collateralize a
fraction of a house. The value of the homes
pledged drove up the coverage statistic.
Figure 4. Requested Loan Use

Requested Loan Use

WEDP MFI Lending as of

April, 2015
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
-

100%
80%
Received from DBE

60%

Onlent to Women

40%
20%
0%

Fixed Assets

Working Capital

WEDP loan terms averaged nearly three years

across all sectors possibly too long considering so
many loans went to inventory purchases for trade.

To assist partner MFIs in transitioning to cash-flow

based lending, WEDP provides on-going training
and mentoring to WEDP-focused loan officers.