M-SME Finance Through Financial Intermediaries

Intermediary Access: Commercial banks, leasing companies, microfinance banks and development finance institutions registered and operating within an ECO member country and supervised by their respective local authorities are eligible to apply. Access to funding is granted upon successful completion of a comprehensive credit review, limit establishment, and legal documentation.

Use of Funds: Intermediaries may deploy funds to SMEs for

(a) working capital financing for industrial, agricultural, trading or manufacturing enterprises for production, trading or service-related purposes and medium-term incremental or start-up working capital requirements for specific projects or investment programmes;

(b) export and pre-export financing of industrial or agricultural enterprises manufacturing for export and producing hard currency revenues; and

For specialized thematic M-SME facilities such as environmental sustainability, digitalization, and women or youth inclusion etc., specific performance metrics and reporting criteria are explicitly incorporated into the facility agreements to guarantee full compliance with the targeted development goals.

Sub-Borrower Criteria: Beneficiaries must be private entities residing and registered within ETDB member states and fulfil the official national M-SME definition of their respective jurisdictions.
Minimum On-Lending Tenor: To ensure sub-borrowers receive structural, long-term capital, intermediaries must maintain a minimum on-lending tenure of 6 months.

Sub-Loan Financing Thresholds: To ensure target-appropriate allocation of capital, ETDB enforces specific limits on the size of individual sub-loans disbursed by financial intermediaries:

SME Financing: Sub-loans are capped at a maximum of USD 1 million and must maintain a minimum threshold of USD 30,000 (or equivalent in local or alternative currencies).
Microfinance: Sub-loans are strictly capped at a maximum of USD 5,000 (or equivalent in local or alternative currencies) to preserve focus on bottom-of-the-pyramid borrowers.

Compliance Standards: Sub-borrowers must strictly adhere to ETDB’s environmental policies and operate outside the Bank’s prohibited activities list.