The Family Business

Abeba Medfu has big plans. Her

detergent-making company, Foam 23,
is outgrowing the shed in her parents
front yard. With her strong customer
base and the promotional assistance
shes been receiving from FEMSEDA,
demand is high. All she needs is more
space, and shes got her eye on a spot
in a business incubator. If she gets it,
shell hire over 20 additional
employees and be able to call herself
the owner of a factory.
How did she get here?
Hard work, intelligence, family
support, and a WEDP loan.
Abeba and her husband, Yoseph, worked in the arts she as a clothing designer and he in the family
photography business. But Abeba had spent some time working in her sisters detergent factory in Awasa. It
was a good business, and Abeba thought their growing family could do better if they made a switch.
In September, 2013, with help from her mother and aunt, they pulled the money together to start Foam 23.
They could see demand was high, but capital remained a problem. Without their own transport, they relied
to hired taxis to distribute their products an expensive and limiting mode of transportation. They also
needed better equipment to increase production.
Neither Abeba nor her husband had ever taken out a loan before, but they needed capital if their business
was to grow. So in May, 2014, Abeba approached SFPI, a microfinance institution (MFI), and requested a
300,000 Birr loan from their nearby Shola branch in Addis Ababa.
Like most MFIs, SFPIs focus was microcredit loans averaging 3,000 Birr ($150). But they had begun
experimenting with larger, individual loans, and successfully applied for access to the World Bank funded
1

WEDP credit line, targeting urban, female small business owners. Their first WEDP loan was disbursed in
January, 2014. When Abeba approached SFPI, the branch manager, Wesene, was ready to listen.
Abeba received the loan, and spent 200,000 Birr on a van and the other 100,000 Birr for machinery. Her
husband delivers the products and mixes the chemicals. She manages sales and marketing, and is active in
promoting the business through FEMSEDA
bazaars and local media. The other two coowners, her mother and aunt, also assist with
production. But on busy days, they bring in four
part-time contract employees to assist.
On average, the small operation produces 400
liters daily, detergent sold in supermarkets, small
shops, and through social unions. Since the loan,
sales have increased by 50% thanks to better distribution and production, and they are easily making their
loan repayment of 14,000 Birr/month. Were paying well, says Yoseph. When we finish paying off this
loan, well be able to keep all the profits and well be millionaires, he jokes.
But like most small businesses, Foam 23 still faces challenges. Competition is hot. Their small premises
limit production. And the cost of chemicals is highly variable due to shortages and Abeba and Yoseph
suspect hoarding on the part of suppliers to drive up the prices. But if they can get their new space, Abeba
is confident with their increased capacity theyll be able to beat the competition.
I ask SFPIs Shola branch manager, Wesene, if she was at all nervous about lending such a large amount to
such a relatively new business with no credit history.
Not at all, Wesene says. I saw Abebas devotion and determination. And theyre paying well, she adds
proudly. Wesene has reason to be proud. The WEDP portfolio at her Shola branch is valued at 7.5 million
Birr, and shes won an award from the MFI for her portfolio. WEDP loans arent just good for entrepreneurs
like Abeba theyre also good for the MFIs.

About SFPIs Loan Portfolio

SFPIs average WEDP loan size is 195,000 Birr. On
average, manufacturing firms like Abebas received

Average Loan Size by Sector

(Birr)
300,000
250,000
200,000
150,000
100,000
50,000
-

197,143 202,308

240,000
100,000

the largest loans. But all of SFPIs WEDP loans fall within Ethiopias missing middle, borrowers seeking
loans in the 50,000 1,000,000 Birr range who were previously too large for MFIs and too small for
commercial banks.
SFPI is a private MFI. Its mission is to help create an attitude of self-reliance and confidence among lowincome rural and urban microentrepreneurs and farmers, with a focus on lending to women.
To date, SFPI has accessed 17.3 Million Birr (approximately $915,000) of the WEDP credit line for
onlending to women like Abeba.