In Ethiopia’s fast-growing but uneven economy, small and medium-sized enterprises (SMEs) are widely seen as the backbone of job creation and innovation. Yet for many of these businesses, access to finance remains out of reach. They are too large for microfinance institutions, but too small or informal to qualify for traditional bank loans. This gap — often referred to as the “missing middle” — has long constrained Ethiopia’s private-sector growth.
Meseret Warner is working to change that.
An entrepreneur and finance professional with deep ties to Ethiopia’s development landscape, Warner has emerged as a strong advocate for tailored financing solutions that meet the realities of local businesses. Her work focuses on unlocking capital for enterprises that have proven demand, employ local workers, and drive productivity, but lack the collateral, documentation, or scale required by conventional lenders.
A Persistent Financing Gap
Ethiopia’s financial system has historically prioritized large state-linked projects and short-term commercial lending, leaving SMEs underserved. While microfinance has expanded access at the very bottom of the market, growing businesses often find themselves stranded once they outgrow small loans.
This “missing middle” includes manufacturers, agribusinesses, logistics firms, and service providers — enterprises that are critical to industrialization and export growth. Without patient capital, many struggle to modernize equipment, expand operations, or survive economic shocks.
Warner argues that financing this segment is not only a development imperative, but also a sound investment opportunity.
“SMEs are resilient by nature,” she has said in past discussions. “They adapt quickly, they understand local markets, and they create real economic value when given the right support.”
Blending Finance With Context
Rather than applying rigid, one-size-fits-all lending models, Warner’s approach emphasizes context-aware finance — capital structures that reflect Ethiopia’s regulatory environment, currency risks, and operational realities.
This includes longer repayment periods, flexible collateral requirements, and technical support alongside financing. By pairing capital with business advisory services, her work aims to reduce risk for both lenders and entrepreneurs.
Such models are increasingly gaining attention across Africa, as development finance institutions and impact investors look for sustainable ways to crowd in private capital without distorting markets.
Building Resilience Through Capital
The past few years have underscored the vulnerability of Ethiopian SMEs to external shocks — from conflict and climate stress to inflation and foreign exchange shortages. Warner’s focus on resilience means helping businesses not only survive disruptions, but build buffers for the future.
That resilience, she argues, is essential for inclusive growth. When SMEs fail, jobs disappear, supply chains weaken, and local economies suffer. When they succeed, the benefits ripple outward — increasing incomes, skills, and regional stability.
A Broader Vision for Growth
Warner’s mission aligns with a broader shift in development thinking: moving beyond aid dependence toward sustainable, market-driven solutions. Financing the “missing middle” is increasingly seen as a bridge between grassroots entrepreneurship and large-scale economic transformation.
While challenges remain — including regulatory complexity and limited long-term capital — advocates like Warner believe progress is possible with the right partnerships and policy support.
As Ethiopia looks to strengthen its private sector and navigate a complex economic transition, efforts to unlock capital for its most overlooked businesses may prove decisive. For Meseret Warner, financing the missing middle is not just about filling a gap — it’s about designing an economy that works for those building it from the ground up
