Digaf Microcredit Providers, a technology-driven microfinance institute in Ethiopia, and the Ethiopian Ministry of Labor and Skills (MoLS) have expressed their intent to work together.
The partnership allows MoLS and Digaf to facilitate access to affordable digital loan products to low- and medium-income individuals with the aim of enhancing financial wellbeing. The announcement of the partnership coincides with Digaf’s launch of Demoz, a digital loan product which extends salaried professionals a short-term and unsecured advance on their upcoming earnings.
The strategic partnership will enable MoLS and Digaf to facilitate suitable loan packages to underbanked segment of the population, through uncollateralized and quick access loan options. Menen Melese, the CEO of Ministry of Labour and Skills, stated the agreement with Digaf allows the Ministry to work towards its aims of enhancing job creation and employee welfare by facilitating financial inclusion.
Access to affordable loans will ensure the creation of job opportunities by expanding enterprise investment in national focus areas of agriculture, mining, manufacturing and construction, hotel, and tourism services, as well as ICT and technology.
Loans provided to employees will support their economic condition and overall wellbeing, increasing production and productivity along the way. Dereje Turi, the CEO of Digaf Microcredit Providers, stated that Digaf aims to provide financial relief to middle to lower income individuals through the application of technology in the financial sector.
He noted that Demoz enables employees to access their salaries in advance with the ability to pay back in up to 15 months. MoLS employees will be among the first to benefit from this loan service. Dereje also stated that Demoz is their first product aimed at digitalizing the microfinance sector and that there are more developments in the pipeline.
Digaf’s digital product offerings will include buy now, pay later financing and targeted loan products for micro, small, and medium enterprises (MSMEs).