<h1 style="text-align:center;">Out and About with Deliver Addis</h1>It's a busy Monday in Addis, people are at work, still trying to get into the swing of the week. Over at the Deliver Addis headquarters, they are preparing for the orders to start to come in. Monday is one of the busiest days of the week as it seems some customers have a weekend hangover and want the convenience of having their lunch delivered to them. On this particular Monday, RENEW decided to ride along with one of the drivers to get a first-hand glimpse of what it’s like to work for Deliver Addis.<figure class="image"><img src="/uploads/rr_collage_0_8acc6a282e.jpg"></figure>Not far away from HQ, Sintayehu a bike driver for Deliver Addis, is all ready to get the orders and feed his hungry customers. As he’s been trained, he is constantly&nbsp;checking his phone to see if orders are coming in. Time is of the essence.Sintayehu, a young man in his early twenties was born and raised in Addis just next to the African Union headquarters. He says he loves his job at Deliver Addis. He has a manageable&nbsp;timeframe to deliver food to customers and he also uses a user-friendly&nbsp;phone-based technology with a GPS link to the delivery&nbsp;address. The application makes his job easy. The first order of the day came in from an expat couple, who live around a place called Global Hotel. Sinatyehu received the order at&nbsp;11:25 AM&nbsp;and was already at the restaurant&nbsp;five minutes after the order came in. By&nbsp;11:52 AM&nbsp;he was at the couples front gate. The wife came and gave him a warm smile, took the food and went back in. He says just seeing the smile on the face of his customers makes his day. Eighteen months after starting this job, Sintayehu has bought a bike and is very excited to continue to work with Deliver Addis in the city he loves.&nbsp;Although we didn’t ride along all day with Sintayehu (we didn’t want to slow him down), it was great to see him in action!RENEW and the Impact Angel Network are proud to partner with <a href="https://www.linkedin.com/in/feleg/">Feleg Tsegaye</a>. and the team at Deliver Addis through our investment in Roadrunner Technology Solutions LLC. Want to learn more about the recent investment? Read our October Press Release.<hr>Applications are now being accepted for the second offering of the <a href="https://www.renewcapital.com/companies">CFO 100 Program</a> which starts in February 2018. Visit the <a href="https://www.renewcapital.com/companies">CFO 100 Program</a> page on our website to learn more.

Learn more about RENEW’s recent partnership

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Out and About with Deliver Addis

<h1>Secrets of Ethiopia’s Momentum</h1>Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now, and in that time much has changed. With a population of 126.5 million according to the World Bank and year-on-year economic growth despite various market-disrupting factors, Ethiopia cannot be ignored. Though the startup scene is slowly gaining momentum, we are patiently waiting and willing to share our thoughts with those interested in taking a look. Stop by the Renew Capital office above Galani Cafe in Jacros to meet with the team. If you are an entrepreneur looking for financing for your asset-light, tech-enabled business check out the&nbsp;<a href="https://venturelab.renewcapital.com/">Renew Venture Lab and apply</a>.&nbsp;<img src="https://lh7-us.googleusercontent.com/docsz/AD_4nXcoHQ3Rthoi9EUprRVZNiBJC6p1azt_gv800xM3kJB3nc2pD6UpAOEkI6FrYDZy_t3HbIAdfPBz2jOWvKw8wmeifuhsbltuDOCc-61eY8Ydohy2GQdrcu1yJgyBVW7AJIZjTMk3RV-RKQ3LaMgr9IWlPpVw?key=n3yt1WnrgJ4UDzR48SvWlA"><h3>Key Developments in Ethiopia's Market Liberalization</h3>The two most impactful changes to the startup ecosystem in Ethiopia in recent times are Safaricom's entry into the market and the government's decision in May to open the banking and retail sectors to foreign ownership. In the coming months, further liberalizations in Ethiopia’s capital markets are expected. Here are a few of the key factors investors should keep in mind about Ethiopia's startup ecosystem:Government Support and Reforms:&nbsp;Ethiopia has been making significant strides in creating a supportive environment for startups. The government has introduced various policies and reforms, such as the Digital Ethiopia 2025 strategy, the Science Technology, and Innovation (STI) policy, and the draft Ethiopia Startup Act. The proposed Ethiopian Startup Act aims to support startups by establishing a National Startup Council and an Innovation Fund, overseen by the Ministry of Innovation and Technology. The Act seeks to foster innovation, remove barriers to entrepreneurship, and enhance access to foreign investment. The Innovation Fund will offer startup scholarships, cover intellectual property fees, and incentivize incubators and accelerators. Startups will also benefit from tax exemptions and simplified trade license processes, reducing operational costs and barriers​ (<a href="https://innobiz-k.et/ethiopias-startup-act/">innobiz-K</a>,&nbsp;<a href="https://www.spotlightethio.com/post/what-ethiopia-s-startup-act-means-for-entrepreneurs">Spotlight Ethio</a>,&nbsp;<a href="https://business.linkupaddis.com/ethiopias-startup-act/">LinkUp Business</a>, <a href="https://afrikanheroes.com/2021/11/22/proposed-startup-act-nears-completion-in-ethiopia/">Afrikan Heroes</a>).Focus on Digitalization: The Ethiopian government is heavily invested in digital transformation initiatives. The Digital Ethiopia 2025 strategy aims to leverage technology for economic growth. Additionally, initiatives like the Addis Ababa City Administration's Innovation and Technology Development Bureau and events like the Digital Startup Marketplace showcase Ethiopia's commitment to fostering a digital economy​ (<a href="https://startupgenome.com/ecosystems/addis-ababa">Startup Genome</a>,&nbsp;<a href="https://ethiopianbusinessreview.net/ethiopian-startup-ecosystem-transformed-by-groundbreaking-legal-reforms/">Ethiopian Business Review</a>).Labor and Energy:&nbsp;Ethiopia is positioning itself as an attractive destination for data centers and business process outsourcing (BPO) services, leveraging its abundant and cost-effective electricity and large labor force. The country has made significant investments in its energy infrastructure, primarily focusing on renewable sources such as hydroelectric power, which currently constitutes the majority of its energy production. This abundant and inexpensive energy supply is a critical factor for industries like data centers that require reliable and cost-efficient electricity​ (<a href="https://www.worldbank.org/en/news/press-release/2024/04/03/energizing-afe-ethiopia-new-world-bank-program-expands-access-to-electricity">World Bank</a>,&nbsp;<a href="https://www.iea.org/articles/ethiopia-energy-outlook">IEA</a>). Additionally, Ethiopia boasts a large and youthful labor force, with more than 61 million people as of 2023. This workforce is increasingly becoming skilled and educated, thanks to investments in education and vocational training programs​ (<a href="https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=ET">World Bank Data</a>,&nbsp;<a href="https://ycharts.com/indicators/ethiopia_labor_force">YCharts</a>). The combination of affordable electricity and a sizable, educated labor force creates a conducive environment for data centers and BPO services, which can benefit from lower operational costs and a pool of available talent.Challenges:&nbsp;Despite these positive developments, challenges remain.<ul><li>Stability: Investors often question the country’s stability and macroeconomic conditions, asking, "Are my assets safe?"</li><li>Limited Funding: Local investors are scarce, and foreign investors are cautious due to the closed nature of the economy and elements of instability.</li><li>Regulatory and Bureaucratic Hurdles: Despite recent reforms, bureaucratic red tape still poses a challenge. The process of registering and incorporating a company, although simplified, can still be cumbersome, including complex tax laws and regulatory requirements that can deter potential entrepreneurs and investors​ (<a href="https://www.benjamindada.com/reforms-give-ethiopias-startup-ecosystem-a-fighting-chance/">Benjamin Dada</a>,&nbsp;<a href="https://bti-project.org/en/reports/country-report/ETH">BTI 2024</a>).</li><li>Infrastructure and Connectivity Issues:&nbsp;The cost and reliability of internet access can create barriers for the smooth operation of tech startups. Additionally, other basic infrastructure needs like transportation and electricity can be inconsistent, impacting business operations​ (<a href="https://www.capitalethiopia.com/2021/06/28/ethiopias-startup-ecosystem-ranks-top-100/">Capital Newspaper</a>).</li></ul>Ethiopia's startup ecosystem is slowly and steadily evolving, with substantial government backing and a growing focus on digital innovation. The potential for growth is immense, given the young and tech-savvy population, government support, affordable energy and labor, and the ongoing digital transformation efforts. Having called Ethiopia home for more than 12 years, I am hopeful the country will continue to overcome its challenges and become a strong force among Africa’s startup ecosystems.Go Deeper on Ethiopia<ul><li><a href="https://www.linkedin.com/feed/update/urn:li:ugcPost:7218873899587911680/" target="_blank" rel="noopener noreferrer">Addis Ababa in 12 Photos</a></li><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Ethiopia_Startup_Ecosystem_Factsheet_bbd213f998.pdf" target="_blank" rel="noopener noreferrer">Ethiopia’s Startup Ecosystem Factsheet</a></li><li><a href="https://www.google.com/maps/placelists/list/YI7_3BViBuFS28_hOMRGaSTsoB0yqA">Addis Startup Ecosystem Google Map</a></li></ul> Interested in other African Startup Ecosystems?&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">Download Renew Capital’s Ecosystem Factsheets on other Ecosystems</a>. We’ll be adding new ones every few weeks!&nbsp;

Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now, and in that time much has changed.

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Secrets of Ethiopia’s Momentum

<h1>Ethiopian Bank Trials Revenue-Based Financing&nbsp;</h1>Cooperative Bank of Oromia has made 18 collateral-free loans for female and male entrepreneurs as part of a first-of-its-kind pilot in the country<ul><li>Innovative Lending -&nbsp; The Cooperative Bank of Oromia introduces revenue-based financing to support entrepreneurs in Ethiopia, with a focus on women.</li><li>Collateral-Free Loans -&nbsp; Revenue-based financing allows loan approval based on evidence of income rather than collateral.&nbsp;</li><li>Supporting Women - A significant portion of the loans disbursed under this pilot program have gone to women.</li></ul><figure class="image"><img src="/uploads/WB_cb4210cc00.png"></figure>In the bustling streets of Addis Ababa, Betelhem Tamene, the dynamic entrepreneur behind a small-scale garment production company, embodies the resilience and ingenuity of Ethiopia's burgeoning small and medium sized enterprise (SME) scene.&nbsp;&nbsp;Tamene's journey epitomizes the challenges faced by women-owned businesses in accessing traditional financing. Armed with determination and a 100,000 ETB ($1,700) revenue-based loan from the Cooperative Bank of Oromia (CBO), she recently embarked on a mission to procure inputs for her diverse product line, ranging from trendy t-shirts to essential student uniforms.&nbsp;Unlike conventional loans with rigid repayment structures and high thresholds for credit history and collateral, Tamene gravitated toward the flexibility of the revenue-based financing (RBF) model. The new lending product is spearheaded by CBO in collaboration with the World Bank's Africa Gender Innovation Lab, Renew Capital and Rise Addis Advisory.Tamene is excited about the new loan product: “This loan offers a great deal of flexibility as repayment is tied to revenue, which is especially beneficial for businesses like mine that experience seasonal fluctuations [and] often struggle to meet the collateral requirements of traditional bank loans.”With the aid of “Souqpass,” CBO's newly launched digital platform, Tamene digitized her financial management. This platform provides a transparent and efficient system that aligns loan eligibility with actual business performance, providing an alternative to collateral-based financing for entrepreneurs like Tamene.&nbsp;On the other side of Addis, Emebet Abit owns a children’s boutique and school accessory shop and noted that she feels she now has an edge over her competition. She also received a collateral-free loan for 100,000 ETB ($1,700) loan and used Souqpass as part of the process. Since using the platform to track her expenses, revenue and inventory, she has consolidated insights about her business through the user-friendly summary dashboards.&nbsp;<figure class="image"><img src="/uploads/IMG_2199_3b78d4caea.jpeg"></figure>Using the Souqpass platform unlocks access to a loan application portal where entrepreneurs can qualify for loans based on the actual performance of their business. The increased visibility into operations reduces the need for the bank to rely on collateral as a risk mitigation measure.Bridging Capital With InnovationBank financing has long been a roadblock for many entrepreneurs, especially women entrepreneurs who often do not have the collateral that banks need to access financing. In addition, a fixed loan repayment schedule is unresponsive to fluctuating macroeconomic realities and the natural seasonality that some industries experience.&nbsp;In basic terms, RBF means that entrepreneurs can pay as they earn. In its simplest form, there are no fixed payments. Their revenue dictates the amount they pay. If a business has a rough month when they do not generate revenue then they do not have to pay.This type of financing is common in the world of venture capital and fintech providers but CBO has pioneered the approach in Ethiopia with support from World Bank's Africa Gender Innovation Lab, Renew Capital and RiseAddis Advisory. To the delivery team’s knowledge, CBO is the first traditional bank to deploy the model.&nbsp;A Step Towards Inclusive FinanceSo far, loans have been disbursed to 20 entrepreneurs, with a majority of them being women. There are two repayment options available:<ul><li>The pure RBF model where companies repay 20% of their revenue each month (no payment if they have no revenue).</li><li>A hybrid model&nbsp;where companies repay 20% of their revenue each month along with a small fixed payment (3% of revenue projections at the time of loan approval).&nbsp;</li></ul>The project team is monitoring loan performance and plans to refine repayment structures and risk management approaches as the pilot progresses.&nbsp;CBO’s revenue-based financing pilot program is still in its early stages, but this could very well become a key innovative strategy for banks to close the financing gap for entrepreneurs across the continent.&nbsp;

Cooperative Bank of Oromia has made 18 collateral-free loans for female and male entrepreneurs as part of a first-of-its-kind pilot in the country

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Ethiopian Bank Trials Revenue-Based Financing 

Renew Capital's presence has expanded to 14 African countries. We aim to provide insight into Africa's startup scene, along with the opportunities and challenges it presents through a series of blogs from our in-country teams. If you share our passion for developing entrepreneurship in Africa, we invite you to check out our open&nbsp;<a href="https://www.renewcapital.com/careers">roles</a>.&nbsp;<h1> My Journey to Renew Capital: Get to Know Samrawit Geremew</h1>From travel and tourism to nurturing Ethiopia's entrepreneurial ecosystemWelcome to the latest feature in our 'Journey to Renew Capital' blog series. In this interview, we get to know Samrawit Geremew, a Senior Project Manager based in Ethiopia, and learn about her journey to Renew Capital. Samrawit was born and raised in Ethiopia and now supports Renew Capital’s entrepreneurial-building projects in her home country. During the interview, we discuss Samrawit's transition from travel to project management and her passion for entrepreneurship development in Ethiopia. We also explore how she is helping to forge a new path for the country through her work.<figure class="image"><img src="/uploads/image_b686acca31.png"></figure>Could you share with us a bit about your background and how you came to join Renew Capital?I hold a Master's degree in Marketing Management and a Bachelor’s degree in Business Administration and Information Systems. I started my career in travel and tourism, working with Ethiopian Airlines and BCD Travel Ethiopia. While I loved my work in travel and tourism, a persistent urge drove me to pursue a field where my efforts could directly impact my community. In October 2020, I made a deliberate shift to Renew Capital. The organization's vision deeply resonated with my personal goals, as it aims to shift the global perspective on Africa from one of giving to one of investing.Time indeed flies when you're making an impact! Could you share any standout moments or stories from your journey with Renew Capital so far?I've been part of the Renew Capital team for more than three years now. Reflecting on this period, one standout aspect of my journey has been leading and supporting capacity-building projects designed to empower women entrepreneurs and startup founders. These projects support Renew Capital's overarching mission to bolster the private sector and provide robust support for women in business.My fulfillment comes from the tangible outcomes of our efforts in directly impacting the community. Witnessing the growth and success stories of the participants we've supported has been a rewarding experience, reinforcing my belief in the transformative power of the work we do. It's these moments that make the journey at Renew Capital truly meaningful and inspiring.How do you manage the balance between consistency and innovation in your role as a senior project manager at Renew Capital? Can you share some insights into your approach?&nbsp;Navigating the delicate balance between consistency and innovation is indeed an art, especially in the dynamic market of Ethiopia. In my role as senior project manager, our projects require continuous evaluation and innovation. The landscape demands agility and adaptability to address the evolving needs of startup founders, women entrepreneurs, resource providers and interns.The key to our approach lies in tailoring training curricula, delivery methods and coaching sessions to suit these dynamic needs while upholding quality and operational efficiency. It's about staying attuned to the ever-changing environment and being responsive to the unique challenges and opportunities that arise. This flexibility ensures that we not only meet but exceed the expectations of our diverse stakeholders in this dynamic and vibrant ecosystem.How has growing up in Ethiopia shaped your perspective? What are your hopes for the future, especially the aspirations you have for the younger generation in Ethiopia?Growing up in Ethiopia— a country with ancient civilization, diverse cultures, rich history and beautiful landscapes—has played an immense role in shaping who I am today. At the same time, I encountered a unique set of challenges growing up here primarily limited opportunities and a lack of adequate mentorship. This made it difficult for me, and others like me across the country to navigate their paths effectively and reach their full potential. Entrepreneurship also faced societal skepticism, compounded by insufficient formal education, training and vital infrastructure to nurture budding entrepreneurs. Despite these hurdles, recent positive movements and collaborative efforts by public and private stakeholders have ignited hope for many.&nbsp;As someone deeply involved in Ethiopia’s entrepreneurial ecosystem today, my journey reflects not just personal growth but a collective effort to reshape mindsets and foster economic stability through innovative projects. The road ahead holds promise, driven by collaborative endeavors and a shared understanding of the transformative potential inherent in startups and SMEs. My hope is for a future where the entrepreneurial spirit thrives, creating a vibrant landscape for economic growth and prosperity in Ethiopia.&nbsp;

From travel and tourism to nurturing Ethiopia's entrepreneurial ecosystem

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Journey to Renew Capital: Get to Know Samrawit Geremew

<h1>Press Release: Renew Capital Angels Invest in Jamii.one, a Micro Insurance Platform</h1>Supporting solutions to expand financial inclusion across Ethiopia, Renew Capital partners with Jamii.one<a href="https://latest-api.renewcapital.com/uploads/FINAL_Jamii_One_Press_Release_e2a1650a7b.pdf" target="_blank" rel="noopener noreferrer">Download the Full Press Release</a>Ethiopia, September 28, 2023&nbsp;—&nbsp;Driving towards financial inclusion for communities across Ethiopia, Renew Capital Angels has partnered with Jamii.one, a trailblazer micro-insurance platform for the African landscape.The company has begun services in Ethiopia, where there are few insurance options for rural communities and only 42% of mobile phone owners own smartphones.<figure class="image"><img src="/uploads/unnamed_96ad0f588d.jpg"></figure>Jamii.one’s growth has come from self-organized Ethiopian community groups called "Iddirs" that bring on average around 50 people together making monthly contributions for informal cooperative-like insurance for funerals and other significant life events.&nbsp;More than 30% of Ethiopians participate in Iddir groups, which often face operational difficulties due to manual data tracking and management, preventing them from fully meeting their members' financial needs. Jamii.one provides an app-based data registration tool for Iddirs and connects them to affordable, reliable insurance options. “When we entered the market it didn't take us long to introduce the Iddir community to Jamii.one. After we tailored our product for Iddir and enabled access to affordable group micro life insurance it was amazing to see the power of technology with the power of community,” says <a href="https://www.linkedin.com/in/tigist-bezu-928519158" target="_blank" rel="noopener noreferrer">Tigist Bezu</a>, co-founder.&nbsp;Importantly, the app is designed to accommodate low literacy levels, offline functionality and limited smartphone usage, making it accessible to a wider segment of the population. This initiative aims to enhance financial inclusions across Ethiopia and beyond.

Supporting solutions to expand financial inclusion across Ethiopia, Renew Capital partners with Jamii.one

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Press Release: Renew Capital Angels Invest in Jamii.one, a Micro Insurance Platform

In a significant move to support the growth of Ethiopian exports and reduce the inflation rate, the National Bank of Ethiopia (NBE) has taken a decisive step to amend the foreign currency retention limit.&nbsp;&nbsp;<h1>Ethiopia Doubles Foreign Currency Retention Limit for Exporters</h1>Tracing Policy Evolution and Economic Implications as the National Bank of Ethiopia Made Significant Changes<figure class="image"><img src="/uploads/unnamed_3f52256ebf.jpg"></figure>On August 11, 2023, the National Bank of Ethiopia (NBE) announced an amendment to&nbsp;<a href="https://nbebank.com/wp-content/uploads/pdf/directives/forex/fxd-79-2022.pdf">Directive No. FXD/79/2022&nbsp;</a>governing the Retention and Utilization of Export Earnings and Inward Remittances (the “Amended Directive”). This amendment was effected via the Directive for Amendment of the Retention and Utilization of Export Earning and Inward Remittance&nbsp;<a href="https://nbebank.com/wp-content/uploads/pdf/directives/forex/fxd-84-23.pdf">Directive No. FXD/84/2023</a> (the “New Directive”). The New Directive effectively doubles the percentage of foreign currency that exporters are permitted to retain from their forex earnings. In the official announcement, the Governor of the National Bank highlighted that this move is geared toward alleviating Ethiopia's inflation rate, which had surged past 30% during the previous two years, before registering a slight decline to&nbsp;<a href="https://tradingeconomics.com/ethiopia/inflation-cpi#:~:text=The%20annual%20inflation%20rate%20in%20Ethiopia%20eased%20for%20a%20third,slowed%20for%20almost%20all%20components.">28.8% in August 2023</a>.&nbsp;&nbsp;The announcement that came last month from the NBE permits exporters to retain 40% of their export proceeds in foreign currency, twice the amount allowed under the Amended Directive. However, the retention amount for inward remittances remains unchanged at 20%. The New Directive could encourage exports by introducing positive incentives.&nbsp;Tracing the EvolutionThe journey towards allowing exporters to retain their forex proceeds found its origins in August 1996, when NBE introduced Directive No. FXD/02/1996:Directive No. FXD/02/1996:<ul><li>Granted exporters the privilege of retaining a designated portion of their export proceeds in foreign currency.</li><li>First round of amendments in October 1996 focused on expanding the permissible amount of foreign currency (FCY) retention.</li></ul>Directive FXD/11/1998:<ul><li>Allowed exporters to retain 100% of their export earnings.</li><li>Distributed it between accounts A and B in a 10:90 ratio.</li><li>Account A: exporters were allowed to retain 10% of the FCY for an unlimited period of time.</li><li>Account B: exporters retained 90% of the FCY for 28 days, after which it would automatically convert to the local currency.</li></ul>Directive No. FXD/48/2017:<ul><li>Adjusted the FCY retention ratios to a 30:70 distribution across the two accounts.</li><li>Account A: exporters were allowed to retain 30% of the FCY for an unlimited period of time.</li><li>Account B: exporters retained 70% of the FCY for 28 days, after which it would automatically convert to the local currency.</li></ul>Policy adjustment in 2021:<ul><li>Retained FCY amount for exporters increased to 45%.</li><li>Retention accounts A and B were combined into one account with no imposed time frame for conversion.</li></ul>Directive No. FXD/79/2022:<ul><li>Implemented due to an urgent need for currency stability.</li><li>Required businesses to surrender 80% of their forex earnings.</li><li>The surrendered amount was automatically converted into Ethiopian Birr.</li><li>This marked a more stringent turn in the policy evolution.</li></ul>Possible Economic ImplicationsWhile assessing the impact of the most recent directive, it's essential to consider two potential outcomes. On the one hand, the directive introduces positive incentives to encourage exports. The Amended Directive, which required exporters from various industries, including meat processing, grain, coffee, sesame, and leather, to surrender up to 80% of their foreign currency earnings, has been a major concern. As a result, export earnings are on the decline, with&nbsp;<a href="https://www.thereporterethiopia.com/35709/">coffee exports</a>, for instance, dropping by nearly $80M USD since 2022. Furthermore, the&nbsp;<a href="https://www.thereporterethiopia.com/35235/">leather industry,</a> where the high cost of chemical inputs, driven by limited foreign currency access, has escalated production expenses, is also suffering. This has resulted in reduced production capacity, factory closures, and job losses, impacting not only individual producers but also the broader Ethiopian economy.On the other hand, another consequence of the new directive could involve concerns about a reduction in the government's concentration of FCY, which could be mitigated through strategic measures. For instance, ensuring that exporters actively participate in the FCY market by legally providing FCY to importers and businesses would alleviate the burden on the National Bank. Attracting increased Foreign Direct Investment (FDI) through a robust legal framework and favorable business conditions can also counter any potential decrease in the government's foreign currency holdings. Lastly, ensuring government-owned enterprises like Ethiopian Airlines can contribute more effectively to foreign exchange reserves could be another way to reduce the impact.&nbsp;

Tracing Policy Evolution and Economic Implications as the National Bank of Ethiopia Made Significant Changes

Ethiopia Doubles Foreign Currency Retention Limit for Exporters

Join us on&nbsp;<a href="https://us02web.zoom.us/webinar/register/WN_AFBoc_tJSx6ed1tPklSOEQ">October 3, 2023,</a> from 9 AM (4 PM EAT) to 10 AM (5 PM EAT) for a learning webinar in which we will dive deeper into key lessons learned from both pilot projects and discuss what could be next for Ethiopia’s private sector and startup ecosystem.&nbsp;&nbsp;<h1>Strengthening Urban to Rural Linkages and the Trucking, Transportation and Logistics Sector in Ethiopia</h1><figure class="image"><img src="/uploads/Photo_Credit_Renew_Capital_1_e95d6264f9.png"></figure>From late 2020 through February 2021, USAID’s Bureau of Humanitarian Assistance (BHA) conducted a Private Sector Landscape Assessment (PSLA) for Ethiopia that identified and prioritized concrete opportunities to integrate high-impact private sector engagement (PSE) initiatives into USAID BHA’s emergency and non-emergency programming for Ethiopia. Ultimately, the PSLA recommended focusing on two thematic areas for new PSE opportunities:<ul><li>Expanding businesses to rural areas in support of the Mission’s Resilience Food Security Activities (RFSAs); and&nbsp;</li><li>Strengthening the trucking sector within Ethiopia through improving standardizations, planning requirements, utilization of new technologies and improving driver requirements to both improve the delivery and reduce the costs of providing food assistance.</li></ul>In support of these recommendations, USAID BHA launched the Strengthening Humanitarian Assistance and Resilience Private Sector Engagement in Ethiopia (SHARP-SEE) Project in partnership with Renew Capital in March 2022, during which the project team worked to strengthen urban-to-rural linkages and enhance the trucking, transportation and logistics sector in Ethiopia. This collaboration resulted in robust market and ecosystem research, pipeline formation, micro-testing of solutions, as well as the implementation of two pilot projects between February 2023 and July 15, 2023, in Ethiopia.THE LOGITECH INVESTMENT SPRINTThe first pilot project was a 12-week, intensive training program focused on 10 logistics and technology (or “LogiTech”) startups in Ethiopia. Key takeaways from the pilot project included:<ul><li>Renew Capital estimates that the Ethiopian economy needs nearly $1B in investment to overcome its funding gap in the trucking sector and be on par with Kenya’s fleet size per capita.</li><li>Trucking and transportation companies are not tech-enabled; most companies still operate with manual processes.</li><li>Tech-enabled startups have the potential to provide the much-needed innovation to optimize Ethiopia’s trucking and logistics sector.</li></ul>However, Ethiopia’s startup ecosystem remains nascent and un-activated:<ul><li>Ethiopian startups only attracted 0.07% of capital invested in logistics and transport startups in Africa from 2019 to January 2023.</li><li>The average deal size for Ethiopian logistics startups was $170K, significantly lower than other African countries from 2019 to January 2023.&nbsp;</li><li>Ethiopian startups only raised 5.82% of the total capital raised by startups in Africa from 2019 to January 2023.</li></ul>From the project team’s perspective, the lack of easily accessible startup and growth capital is not the problem in it of itself, but it is a symptom of a nascent startup ecosystem within Ethiopia. In general, startup founders need support to scale in key skill areas, including product development and customer engagement, operations (especially cash management), as well as pitching and investment readiness.The SHARP-SEE project team aimed to address these challenges through the key project activities addressed in the next section.<img><img src="/uploads/Photo_Credit_Renew_Capital_2_6098f5a73c.png">ACTIVITIES &amp; KEY OUTCOMES:The LogiTech Investment Sprint aimed to address persistent challenges in Ethiopia's logistics sector by training and coaching LogiTech startups over a 12-week program that covered essential business skills, such as strategic planning, organizational structure, financial management, product development, customer engagement and investment readiness.The program also assisted startups in refining their minimum viable products through customer interviews, setting growth targets and KPIs and continuous performance analysis. Participating startups focused on various areas within logistics, including intercity logistics, public transportation, last-mile delivery, B2B logistics and digital tools for truck operators involved in import and export.These innovations align with Ethiopia's modernizing digital economy, paving the way for a more tech-enabled logistics sector. Additionally, they have the potential to enhance humanitarian aid delivery by introducing digital solutions to a traditionally un-digitized sector. Furthermore, tech-enabled logistics services can strengthen urban-to-rural linkages, improve relationships between manufacturers, suppliers, and retailers, and enhance urban and intercity transportation and improve the efficiency of humanitarian aid deliveries over the long term as processes become optimized by technological processes. Overall, these initiatives aim to make logistics more efficient and contribute to the development of Ethiopia's digital economy.CHECK OUT THIS&nbsp;<a href="https://drive.google.com/file/d/1BuMIySXmVo8XEqNUs8YNWOvXzMkWXWD2/view?usp=drive_link">VIDEO</a>&nbsp;HIGHLIGHTING THE PROJECT’S FINAL PITCH EVENT.&nbsp;THE AGRICULTURAL INPUT SUPPLY CHAIN OPTIMIZATION (AGISCO)&nbsp;In terms of urban-to-rural linkages, the project team learned the following as part of Phase I and Phase II research:<ul><li>The agricultural input supply chain is broken throughout Ethiopia.&nbsp;</li><li>Smallholder farmers lack access to reliable and steady supplies of inputs.</li><li>Smallholder farmers and agrodealers alike lack access to capital, preventing them from scaling.</li><li>Agrodealers are unable to receive timely deliveries of high-quality inputs at a reasonable price.&nbsp;</li><li>Typically, agrodealers travel long distances to purchase inputs and arrange their own logistics, resulting in high costs.</li></ul>In light of these findings, the project team launched the Agricultural Input Supply Chain Optimization (AGISCO) project in partnership with a local Ethiopian agritech startup. This Ethiopian technology startup provides a digital marketplace for smallholder farmers to access inputs, mechanization services, climate advisory content and tailored credit products. AGISCO’s objective was to de-risk the expansion of this product into one of USAID BHA’s target resilience and food security (RFSA) project areas, specifically five woredas in Eastern Hararghe.&nbsp;&nbsp;The AGISCO project engaged a local Ethiopian agritech company to support its growth and sustainability in Eastern Hararghe through a KPI-focused approach. The project’s objectives included enhancing agricultural input distribution, increasing digital adoption, improving supply chain efficiency and expanding access to credit.The project was divided into three phases:<ul><li>Phase I: Landscape Mapping, Agent Training and Platform Optimization</li><li>Phase II: Recruiting and Training Additional Agents</li><li>Phase III: Deployment of Agents and Platform Services into Additional Woredas</li></ul>Top-line objectives of the pilot project included:<ul><li>Train 24 New Agents Onboarded</li><li>Onboard at least 12,000 new farmers onto the platform</li><li>Provide access to inputs, mechanization services, finance and climate advisory to onboarded farmers</li><li>Reduce costs of logistics incurred by smallholders</li></ul>As part of AGISCO, the project team also provided strategic advice and recommendations to the local agritech partner throughout the project during weekly check-in calls.TO DATE (SEPTEMBER 13, 2023), THE AGISCO PROJECT HAS ACHIEVED THE FOLLOWING KEY OUTCOMES:In achieving these project outcomes, the project team has learned the following key lessons and identified key opportunities:<figure class="image"><img src="/uploads/Screenshot_2023_09_13_at_5_28_40_PM_b37d48eb2c.png"></figure>Growth of Fintech Could Increase Access to Finance: The current situation in Ethiopia is a critical moment for the growth of access to finance and fintech services. The introduction of M-PESA and competition among local providers like Telebirr marks a significant change in the market dynamics. Fintech companies in Ethiopia are competing for market share and expanding their service offerings. This competitive environment could drive innovation and the development of tailored financial products to meet the needs of different customer segments, including smallholder farmers. However, the market is still largely not tech-enabled, creating challenges that may impede scaling on the ground in the near future.Coordination for Resource Optimization:Efficient coordination between orders and suppliers is crucial for maximizing the utilization of limited logistics and transportation resources. As observed in the pilot project, technology can play a pivotal role in enhancing the capacity utilization of existing transport resources.Technology as a Solution: Platform-driven technological approaches can facilitate the dissemination of multiple services, such as financial services, logistics provisions, input distribution, and educational and climate-related materials, through a single platform. The flexibility of these services, if done correctly, could dramatically expand the ability of smallholders to access crucial services, increasing incomes and overall food security in the long term.

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Strengthening Urban to Rural Linkages and the Trucking, Transportation and Logistics Sector in Ethiopia

Ethiopia’s fintech infrastructure is improving with the soft launch of Safaricom Ethiopia’s mobile financial service M-PESA, which boasts 51 million customers across Africa, in Addis Ababa, on August 16, 2023. The service expects to make a full national launch in September.<h1>M-PESA Launches in Ethiopia</h1><figure class="image"><img src="/uploads/Screenshot_2023_08_20_at_6_41_31_PM_3019bbc216.png"></figure>Photo courtesy of Andrew LarsenEthiopia’s fintech ecosystem has lagged behind its neighbors in recent years as a result of Investment Proclamation 1180’s ban on foreign investment in the sector among other factors. However, in May 2023, this prohibition was waived to allow M-PESA, a mobile money platform with 51 million customers and owned by Kenya’s Safaricom, to operate in Ethiopia for a licensing fee of $150M USD.&nbsp;For context, according to Africa: The Big Deal Database, while Kenyan fintech startups have raised $517.8M since 2019, Ethiopian fintech startups have only raised $17.6M. This disparity results in Kenya having raised 67.6x more capital for fintech on a per capita basis than the Ethiopian market, underscoring the disparity. <img src="/uploads/Screenshot_2023_09_06_at_11_43_27_AM_a01ec577a6.png"> &nbsp;Kenyan fintech startups have attracted more than 67x more capital per capita than Ethiopia.Source:&nbsp;Renew Capital's analysis of publicly disclosed deals in startups since 2019 captured in “Africa: The Big Deal Database.”After a three-month pilot test, M-PESA has <a href="https://safaricom.et/index.php/news-insights/97-safaricom-ethiopia-goes-live-with-m-pesa" target="_blank" rel="noopener noreferrer">announced</a> it is launching and joining Ethiopia’s mobile money market as a competitor to the state-owned Ethio Telecom’s flagship financial mobile money service provider, Telebirr. M-PESA is now available for Safaricom Ethiopia’s 4M customers. For context, Safaricom Ethiopia has been expanding its network across 147 towns in Ethiopia over the past 10 months.However, customer acquisition will likely remain challenging for M-PESA. Telebirr, the Ethiopian government-owned mobile money service, had a two-year head start, launching initially in May 2021 and introducing a super-app version in March 2023, which provides users with access to a large assortment of services within the app's single interface. The app now provides eCommerce options, food delivery, entertainment, utility bill payment options and transportation payment options. The Telebirr App currently owns over 20 mini apps and is also providing benefits to the startup ecosystem by allowing local Ethiopian startups access to the app's user base of over 30 million users.&nbsp;Moreover, in April 2023, the Ethiopian government began requiring fuel payments to be completed using Ethiotelecom's Mobile Money app, Telebirr. This further entrenched Telebirr’s position as the market leader in mobile money in Ethiopia just one month before the Ethiopian government awarded M-PESA its license to operate.Similarly, in April 2023, Chapa, one of Ethiopia's leading online payment providers, announced that it would be teaming up with Telegram to enable merchants using Telegram to accept payments from their customers using a Chapa integration. Thousands of businesses throughout Ethiopia are already selling products through the messaging app; this partnership allows those merchants to accept payments from their customers using mobile money, bank transfers, or debit/credit cards without leaving the app.&nbsp;Importantly, as of August 15, 2023, Chapa partnered with&nbsp; COOP Bank to launch the Coop-Chapagram bot integration that operates within Telegram. The feature allows users to access numerous financial services through the Telegram application, according to COOP Bank.&nbsp;Safaricom’s presence in multiple African countries might be the competitive advantage M-PESA brings to the market that has been monopolized by the state-owned service provider, Telebirr. If commerce is facilitated between the countries in which M-PESA has a presence, it could also end up becoming an asset for the AfCFTA.In summary, the entry of M-PESA into Ethiopia is a crucial next step in increasing financial access and inclusion in Ethiopia, where approximately 78% of the population lives in rural areas.&nbsp;For example, according to the World Bank, only 35% of adults in Ethiopia have access to formal bank accounts. Comparatively, in Kenya, 82% of adults have an account, while in Rwanda, 50% of adults reported having a formal bank account. In sub-Saharan Africa overall, 43% of adults have an account.&nbsp;Increasing the number of mobile money payment services can help to increase access to finance for rural populations and others throughout Ethiopia. Finally, the market competition between M-PESA and Telebirr will help to increase the quality of service provision between the two companies as they compete for market share, a generally good free market outcome.

Ethiopia’s fintech infrastructure is improving with the soft launch of Safaricom Ethiopia’s mobile financial service M-PESA.

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M-PESA Launches in Ethiopia

Renew Capital welcomed a dynamic team of 11 exceptional young professionals ranging from units in Project Management, Investment, Human Resources and Marketing and Communications.<h1 style="text-align:justify;"> Turning Pages and Chasing Dreams</h1>11 Interns Share Their Career Aspirations and Book Recommendations<figure class="image"><img src="/uploads/Meet_the_team_325b170a67.png"></figure>Renew Capital internship is an opportunity for recent graduates based in Africa to embark on a quest to unearth their professional goals, bring innovation to the table and invest in their future success.&nbsp;During the internship, the young professionals will work on various investment and private sector development projects that will enhance their professional skills and gain work experience in an international firm operating across eight African countries. Get to know them as they share books that have influenced and inspired them.&nbsp;1. Agnes Mbuvi- Investment Intern. Kenya.a) What are your professional goals?&nbsp; To become a top financial analyst in Kenya and Africa as well. I also hope to start my own investment firm in the future. where I will be able to offer investment solutions that work for the African context.b) What book would you recommend?The Mountain Is You: Transforming Self-Sabotage Into Self-Mastery by Brianna Wiest. This self-help book helped me overcome self-sabotaging tendencies. The author encourages individuals to break free from self-destructive patterns, cultivate self-compassion and build resilience to live a fulfilling life. 2. Eden Hailemariam- Investment Intern. Ethiopia.a) What are your professional goals?&nbsp;To become an exceptional investment consultant. I pursued this career path to help people make informed investment decisions which in turn will have positive micro as well as macroeconomic and social effects.b) What book would you recommend?To Kill a Mockingbird written by Harper Lee. It narrates the childhood of Scout and Jem Atticus. I love the extent Atticus goes to defend what he believes is right, regardless of the challenges he faces. It explores themes of racial injustice, mistreatment of innocent people and social prejudice. 3. Jordan Karenzi- Investment Intern. Rwanda.a) What are your professional goals?&nbsp;I would like to learn how to conduct sound market research and map out the right investments. Also, I would like to improve my communication skills and ability to relay information relating to the investment practice.b) What book would you recommend?The Third Door by Alex Banayan. This is a story of a young man with a dream of interviewing the most successful people in the world from different fields and different walks of life to understand the secret to their success. When Alex was at his highest, he got knocked down but he found a way to get up and push through. I applied the general message to keep a positive mindset and consider small steps as progress. 4. Nahomi Kassahun- Investment Intern. Ethiopia.a) What are your professional goals?&nbsp;Currently, I am working towards improving my communication skills, especially public speaking. I hope to explore diverse career paths, build a network and develop my leadership abilities.b) What book would you recommend?Divergent Trilogy by Veronica Roth is an extremely thought-provoking book that is set in the future. It made me question the meaning behind their nickname. The characters are based on important values: Abnegation (selflessness), Amity (kindness), Candor (honesty), Erudite (intelligence) and Dauntless (bravery).&nbsp;5. Ruth Ayalew- Project Intern. Ethiopia.a) What are your professional goals?&nbsp;To become a visionary policy maker. I am driven by a deep desire to bring about transformative and systematic change in Ethiopia's current landscape. I firmly believe that by implementing innovative and sustainable policies, we can overcome the obstacles that hinder progress and unlock the true potential of this remarkable nation.b) What book would you recommend?7 Habits of Highly Effective People&nbsp;by Stephen Covey. During my stay at the Young African Leaders Initiative (YALI), I was encouraged to read the book to understand how to live well with others and the dynamics of a great team. I learned that people have various behavioral styles.&nbsp;6. Heran Getaneh- Project Intern. Ethiopia.a) What are your professional goals?&nbsp;To become a detail-oriented manager and acquire a well-rounded skill set in project management. I hope to not only focus on my role but explore various aspects within the work environment and become a stellar collaborator that achieves success working with cross-functional teams.b) What book would you recommend?Educated by Tara Westover left an unforgettable impact on my spirit. The author's brilliance resides in her ability to challenge cultural standards while also appreciating the power of education. It has taught me to value any chance for personal development and learning that comes my way.&nbsp;7. Uwera Kamuhangire Myriam- Project Intern. Rwanda. a) What are your professional goals?&nbsp;To be an illustrious project manager or consultant in Rwanda. I also want to be an entrepreneur in the near future because I enjoy working in dynamic and flexible environments.b) What book would you recommend?The Secret by Rhonda Byrne. It talks about the law of attraction and how our mind is the greatest weapon that can be used to work for or against us. It teaches how positive thoughts can manifest positive outcomes and we can use this to achieve personal growth and success.&nbsp;8. Hiwot Endale- Project Intern. Ethiopia.a) What are your professional goals?&nbsp;In the next five years, I want to identify the career path that I want to follow, build my professional network, perfect my skills and learn more about the entrepreneurial and investment sector.b) What book would you recommend?12 Rules for Life&nbsp;by Jordan B. Peterson. In this remarkable read, the renowned clinical psychologist narrates unique and well thought rules to help us maintain order, improve our interpersonal interactions and establish strong bonds with others.&nbsp;9. Shaynerose Magabi- Marketing and Communications Intern. Kenya.a) What are your professional goals?&nbsp;To hold a leadership position soon and make data-driven decisions by improving my skills in data analysis and implementing effective marketing campaigns and conducting market research. I aim to excel in public speaking and confidently communicate my ideas with a diverse audience.b) What book would you recommend?The Art of Happiness by the Dalai Lama and Howard C. Cutler. This transformative guide sheds light on how individuals postpone their happiness and forget to live in the present.&nbsp;It implies if you aren't happy in the present, you'll never be happy in the future. Sadly, people fail to show compassion towards themselves by equating their self-worth to their success.&nbsp; 10. Joy Mburu- People Operations and Development Intern. Kenya.a) What are your professional goals?&nbsp;I am looking forward to helping with the implementation of company policies and providing essential support to the People Operations and Development unit while learning its purpose.&nbsp;My career aspiration is to get a Human Resource Management certification that will enable me to grow and take on leadership roles soon.b) What book would you recommend?The Winner by David Baldacci. This book takes you on a journey of trust and betrayal. “What decisions would you make in the face of intense desperation?" Characters within the plot are forced to make challenging decisions. It explores the devastating impact of betrayal from close friends and will make you shift alliances throughout the whole novel.&nbsp;11. Mediatrice Kampire- Data Science and Analytics Intern. Rwanda.a) What are your professional goals?&nbsp;To become a senior data analyst and project manager within the next three years by completing relevant training courses and gaining practical experience.b) What book would you recommend?Who Moved My Cheese by Dr. Spencer Johnson is a motivational business fable that explores the challenges of change and adaptation. The book emphasizes the importance of embracing change, being flexible and proactively seeking new opportunities.

11 Interns Share Their Career Aspirations and Book Recommendations

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 Turning Pages and Chasing Dreams 

<h1>Unpacking Ethiopia's Startup Landscape: Join the NINJA Acceleration Program Graduation</h1>An opportunity to explore and understand Ethiopia’s startup ecosystem.The entrepreneurial spirit is alive and thriving in Ethiopia and the upcoming "Ethiopia NINJA Acceleration Program Graduation" offers a thoughtful look into this growing landscape.&nbsp;Presented by the Japanese International Cooperation Agency (JICA) and the Ethiopian Ministry of Innovation and Technology (MInT), this hybrid event is poised to provide valuable insights on Ethiopia's startup ecosystem while celebrating six startups graduating from the intensive NINJA Acceleration Program.<figure class="image"><img src="/uploads/Six_S_Us_9ffeae5b81.jpg"></figure><h3>&nbsp;Participate In-Person or Online</h3>&nbsp;The "Ethiopia NINJA Acceleration Program Graduation" is designed for both&nbsp;<a href="https://docs.google.com/forms/d/e/1FAIpQLSea41uEyMTNm1f7jjPetIRec30rRqH-QlFtykldl40MwAlzow/viewform">in-person</a> and<a href="https://us02web.zoom.us/webinar/register/WN_AMqimTxuTvGestrZCoHabQ#/registration">&nbsp;online attendance</a>.<ul><li>Date: August 15, 2023</li><li>Time: 10:00 AM - 12:15 PM (East Africa Time)&nbsp;</li><li>Location: Sapphire Hotel, Addis Ababa, Ethiopia, or<a href="https://us02web.zoom.us/webinar/register/WN_AMqimTxuTvGestrZCoHabQ#/registration">&nbsp;follow online</a></li></ul>The event includes the presentation of a landscape survey by JICA, a panel discussion and the celebration of six startups that have completed&nbsp;the intensive NINJA Acceleration Program.<h3>Meet the Panelists</h3><ul><li>Mr. Selamyhun Adefris: Director General Innovation and Research at MInT&nbsp;</li><li>Mr. Pazion Cherinet: HealthTech entrepreneur and CEO of Orbit Innovation Hub</li><li>Mr. Tigabu Haile: Founder of Eshi Express and MERI Podcast</li><li>JC Oelofse: Investment Lead at Renew Capital</li></ul><h3>&nbsp;Graduation of Six Startups</h3>This event marks a significant milestone for the six finalist startups that were nurtured under the "Ethiopia NINJA Acceleration Program." These innovative companies are eager to share their journeys and insights.<h3>The Six Graduating Startups</h3><ol><li>Guzo Technologies PLC (Guzotech): Creating immersive Internet of Things and XR experiences for businesses and government.</li><li>WeCare Digital Health: Offering virtual health consultation services, connecting healthcare professionals with clients from their homes.</li><li>Gebeta Maps: Providing software solutions to facilitate logistics, routing, and more, at cost-effective rates.</li><li>Shemach: A digital marketplace linking retailers and FMCG manufacturers, enhancing supply chain efficiency.</li><li>Fibermart Trading: Solar-powered kiosks to provide financial access and connectivity for frontier markets.</li><li>Taywan: A B2B E-commerce platform empowering trade and restocking for retailers across Ethiopia.</li></ol>&nbsp;<a href="https://us02web.zoom.us/webinar/register/WN_AMqimTxuTvGestrZCoHabQ#/registration">Join us</a> on August 15!&nbsp;&nbsp;

An opportunity to explore and understand Ethiopia’s startup ecosystem.