The coffee ceremony is an integral part of Ethiopian cultural life.

An old Ethiopian proverb perhaps best describes its

importance: coffee is our bread.
When single mother Hagere Ayalew Mulugeta decided to start a food service business in 2013, she started with a
kilo of coffee beans. It was all she could afford, but it was enough to start her microbusiness, a traditional coffee
house, complete with grass cuttings scattered on the floor.
Her business did well, and customers began requesting food. So with the profit from her coffee business, she added
shiro, a simple bean dish, to the menu, and eventually she added soda and beer. But expansion was a challenge.
Every day she shopped for supplies, with only the profits from the prior day as capital. If business was slow on
Monday, supplies were low on Tuesday, and she couldnt earn as much in sales. It was a vicious cycle.
And then she heard about the Amhara Credit and Saving Institute (ACSI) and its entry into the WEDP program.
ACSI, a microfinance institution (MFI) based in Bahir Dar, had begun experimenting with larger, individual loans. The
MFI successfully applied for access to the World Bank funded WEDP credit line. This credit line was designed to
target the missing middle of urban, female small business owners who needed loans larger than MFIs traditionally
provided. ACSIs first WEDP loan was disbursed in February, 2014, and today, the MFIs averaged WEDP loan size
is 379,402 ETB (nearly $19,000).
Using her sisters home as collateral, Hagere applied for and received a 200,000
ETB ($10,000) loan from ACSI in April 2015. Where most Ethiopian banks only
provide one to two year loan terms, most MFIs will make loans up to three years,
the term Hagere received. Her repayments over the course of her three-year loan
term are 6,800 ETB ($340) per month. With the funds, she purchased equipment
such as tables, a gas cylinder, a refrigerator, etc. Thanks to the loan and her
business growth, she has regular funds to buy the food supplies she needs, when
she needs them. After taking the loan, I am selling the items that I used to have to
say Id run out of, says Hagere.
Was she nervous about taking out a loan this large?
Not at all.
Hagere is confident that her business is profitable enough to repay the entire loan.
In fact, she plans to repay early using her business income and to take out
Hagere at her Coffee House
another, larger loan to start a new caf service. Is she over confident?
Unlikely. Hagere does consider worst case scenarios the assets she purchased with the loan, she says, can be
sold to repay the loan if need be. But she has no intention of failing, and she recommends WEDP loans to other
small business women... if theyre willing to work hard and use the funds for the business and only the business. She
says, Using the money from the loan exactly for my business enabled me to increase my working capital and to
possess permanent assets.

Hagere has reason to be confident. When she started the business, she was the sole employee. Later, she hired a
cook and a waiter. Today, she has 12 employees. This number usually increases to 17 during the dry season when
business peaks.
Because of her drive and thanks to the WEDP loan, Hagere was able to take her tiny coffee ceremony microbusiness
and expand it to a small business. For Hagere, coffee truly was her bread.

All of ACSIs WEDP loans fall within Ethiopias missing middle, borrowers seeking loans in the 50,000 1,000,000
Birr range and whos credit needs were previously too large for traditional microcredit and too small for commercial
bank loans.
ACSI was initially established in
October 1995 as a department with
the former Ethiopian Relief
Organization (ERO), the current
Organization for Rehabilitation and
Development in Amhara (ORDA). It
was licensed by the National Bank
of Ethiopia as a micro finance
intermediary share company in
April 1997.

ACSI's Average Loan Size by

Sector (ETB)
600,000
500,000
400,000
300,000
200,000
100,000
-00

To date, ACSI has accessed 139

million ETB (approximately $7
million) of the WEDP credit line and
onlent over 128 million ETB ($6.4 million) to women like Hagere.
For more information, contact Fran Toomey-Mys at: frances_toomey-mys@dai.com or Francesco Strobbe at:
fstrobbe@worldbank.org