“The Ethiopian government is taking the lead in building resilient and inclusive rural finance and insurance markets,” said Dr. Girma Amente, Ethiopia’s Minister of Agriculture. “Our vision is to establish a sustainable agricultural credit and insurance ecosystem that serves all farmers, herders and rural enterprises, particularly those most vulnerable to climate and market risks.”

Agriculture is the backbone of Ethiopia’s economy, contributing 32 percent of GDP and employing nearly two-thirds of the population. Yet less than 10 percent of bank credit reaches the sector, and insurance penetration remains below 0.4 percent. As climate risks intensify, most smallholder farmers are left without tools to manage shocks or invest in adaptation.

The RFSU aims to address these gaps through four core functions:

Coordination and synergies: Aligning actions within the Ministry of Agriculture, across government agencies such as the Ministry of Finance and National Bank of Ethiopia, and with insurers, banks and development partners.

Policy advocacy: Recommending reforms to help banks, insurers and other businesses offer affordable, sustainable financial services to farmers and rural enterprises.  

Public data infrastructure: Developing systems to collect and analyse data that reflects the needs of farmers, pastoralists, and agri-SMEs.

Evidence and knowledge generation: Capturing lessons from pilots and innovations to inform policy, regulation and investment.

The RFSU is supported by a coalition of national and international partners, including technical contributions from the World Food Programme, African Development Bank and the International Fund for Agricultural Development.