Ethiopian merchants could find it easier to access business financing under a new initiative designed to use digital transaction records to support working-capital lending.

Visa and Ethiopian company ETTA Solutions have announced a strategic partnership framework aimed at connecting merchants’ digital payment activity with potential financing opportunities. The initiative could help businesses demonstrate their trading activity through transaction histories rather than relying exclusively on traditional lending requirements.

For small shops, retailers and other merchants, access to working capital is essential for purchasing inventory, managing cash flow and expanding operations. Businesses with limited collateral or formal financial documentation can face difficulties obtaining loans through conventional channels.

By using digital payment records to assess business activity, the initiative could create additional ways for eligible merchants to demonstrate their commercial performance to financing providers.

The development comes as Ethiopia’s financial sector undergoes broader reforms, including efforts to expand digital payments, strengthen financial services and increase private-sector participation.

If implemented effectively, transaction-based financing could help more Ethiopian businesses access credit, improve cash-flow management and invest in growth. However, the initiative’s eventual impact will depend on lender participation, eligibility rules and the financing products made available to merchants.