Cooperative Bank of Oromia’s Michu Platform Disburses 50 Billion Birr in Digital Loans

Cooperative Bank of Oromia has announced that its digital lending platform, Michu, has disbursed 50 billion birr in collateral-free loans to micro, small, and medium enterprises (MSMEs) across Ethiopia since launching in late 2021.

The platform has now reached 2.86 million loan accounts, reflecting rapid growth in the adoption of digital financial services. The latest figure marks a 25% increase from December 2025, when total disbursements stood at 40 billion birr, disbursed to 2.44 million borrowers. The addition of 10 billion birr in just four months signals accelerating demand for AI-driven credit solutions.

AI-powered Lending Expands Financial Inclusion

Developed in partnership with Kifiya Financial Technology PLC, Michu uses alternative data and artificial intelligence to assess creditworthiness, allowing borrowers to access loans without traditional collateral or physical branch visits.

Approximately 80% of borrowers are under the age of 35, indicating strong uptake among young entrepreneurs transitioning into formal business activities. The platform has supported business expansion in retail, services, and small-scale production sectors.

A specialized product, Michu Kiya, has been designed to improve women’s financial inclusion. As of December 2025, the product had disbursed 9.6 billion birr to female entrepreneurs, supporting both informal and formal business activities.

Flexible Loan Structure for SMEs and Informal Businesses

Loan products are structured based on business needs and level of formality:

• Formal businesses: up to 300,000 birr per month
• Informal businesses: up to 15,000 birr over a two-week cycle
• Women-focused loans: up to 5,000 birr for informal activities and 75,000 birr monthly for formal enterprises

Loan limits increase progressively based on repayment performance, enabling businesses to scale gradually while maintaining manageable credit risk.

Expanding Rural Financial Access

Beyond urban MSMEs, the bank has integrated nearly 600,000 farmers into its Farm Pass digital ecosystem, connecting cooperatives, buyers, and service providers to improve access to credit and strengthen agricultural value chains.

Michu has also received international recognition, including awards at the Global SME Finance Forum 2025, where the bank was named Sustainable SME Financier of the Year, reflecting its contribution to financial inclusion and enterprise development.

Analysts note that continued growth in digital lending could play a key role in improving credit access, supporting entrepreneurship, and accelerating Ethiopia’s transition toward a more technology-enabled financial system.

source: EBR