The World Bank Group (WBG), with private and public sector partners, set an ambitious target to achieve Universal Financial Access (UFA) by 2020. The UFA goal envisions that, by 2020, adults globally will be able to have access to a transaction account or electronic instrument to store money, send and receive payments. The WBG has committed to enabling one billion people to gain access to a transaction account through targeted interventions. Ethiopia is one of the 25 priority countries for UFA initiative.
In Part I of our blog —based on a background note we wrote for the World Bank’s 2017–2022 Country Partnership Framework for Ethiopia—we presented our key findings on the spatial or regional distribution of poverty and child malnutrition in Ethiopia.
In Part II of our blog, we look at changes in road density over the ten years from 2006 to 2016, and in nightlights in six cities over four years from 2012 to 2016.
J’étais récemment au Kenya où j’ai rencontré des agriculteurs expérimentés. Ils m’ont fait visiter leur exploitation et m’ont parlé des problèmes auxquels ils devaient faire face depuis quelques années, une météo imprévisible ayant eu des effets dévastateurs sur leurs récoltes.
The challenges faced by small farmers are similar across the developing world – pests, diseases and climate change. Yet in Africa the challenges are even greater. If farmers are to survive at current rates (let alone grow), they need to have access to high-yielding seeds, effective fertilizers and irrigation technologies. These issues threaten the region’s ability to feed itself and make business-growth and export markets especially difficult to reach. Other factors include the rise in global food prices and export subsidies for exporters in the developed economies, which leave African farmers struggling to price competitively.
On January 22, 2012 at 6:00 am in the morning, Ethiopians living in the Efoyta Market neighborhood in Addis Ababa woke up to a burning five-story building. More than 13 hours later, the fire had killed two people, destroyed 65,000 square miles including several homes and businesses, and produced damages amounting to ETB 20 million ($1 million), a huge amount in a country where nearly 30% of the population live on less than $1.90 a day.
If you are curious to know which country has achieved double digit growth in the last 12 years, making it the fourth fastest-growing in the world, the answer is Ethiopia. And what is more striking is that if Ethiopia sustains its current pace of growth, it will become a middle income country by 2025.
Since the beginning of time, women have been at a disadvantage when looking for financial loans. One reason is that women have less control over land and assets that can be used as traditional collateral. This puts a real damper on her ability to launch an enterprise or, even when she manages to launch one successfully, to take it to the next level.
In Africa, women’s entrepreneurial knack is self-evident to anyone who sets foot on the continent—just look at any roadside! So, this problem is likely quite costly and holding back development. Can we solve it somehow?
As it happens, the Entrepreneurial Finance Lab, an entity that spun off from Harvard’s Center for International Development in 2010, has developed a tool using something called “psychometric testing”, which measures personal characteristics such as knowledge, skills, education, abilities, attitudes and personality traits as a means to predict how likely it is a person will pay back a loan. And it is proving quite effective. Could this be a way to finally help find a solution for women who don’t have any credit history or hold formal title to assets that are traditionally accepted as collateral?
The World Bank Group’s Global Practice for Finance and Markets (GFMDR) started thinking seriously about this, and worked to see it if it could be integrated in a Bank-funded project in Ethiopia (the Women Entrepreneurship Development Project, US$50m). Francesco Strobbe leads the project team, and started to discuss the issue with us in the World Bank’s Africa Region Gender Innovation Lab (GIL). “I thought this was a great opportunity to test some innovative measures to see if we could reach a real breakthrough with much potential for women entrepreneurs—in Ethiopia and elsewhere.”