Breaking Barriers: How Ethiopia's Women Entrepreneurs are Excelling in Male-Dominated Industries and Creating Jobs

In a busy carpentry workshop on the outskirts of Addis Ababa, workers are moving efficiently between machines, shaping and assembling wood into finished furniture. Hanna Berhanu oversees the operations of Abyssinia Woodworks PLC, a growing business that manufactures household furniture for homes and real estate companies.

Hanna's journey into manufacturing was unconventional. Before starting her business in 2015, she worked as an importer, sourcing surveying instruments from international suppliers. However, a foreign currency shortage forced her to stop importing, pushing her to explore new business opportunities. The idea of opening a workshop came from her brother, who saw potential in the local furniture market. After researching the business, Hanna decided to take the leap.

"At first, I was unsure," she says. "I didn’t have a background in carpentry, but the more I understood the work, the more I began to enjoy it."

Starting with limited equipment, Hanna quickly realized that expanding her business required improving both product quality and production speed. Securing financing for modern machinery was challenging—many banks were hesitant to lend and demanded high interest rates. This changed in 2021 when she was granted a loan through the World Bank’s Ethiopia SME Finance Project. The money allowed her to purchase 13 modern machines, thus helping her improve both efficiency and product quality. Since its inception, the Ethiopia SME Finance Project has provided over $400 million in financing to SMEs in the manufacturing and agro-processing sectors across the country.

The World Bank’s involvement has been crucial. While banks often view lending to SMEs as risky, the Ethiopia SME Finance Project’s risk-sharing mechanism helps mitigate risks, encouraging lending to underserved industries. This support allowed Hanna to secure the capital needed to modernize her operations—an achievement made more significant by the broader challenges in Ethiopia’s financial landscape. Only 15.8% of firms in Ethiopia have access to bank loans or lines of credit, leaving many SMEs struggling to access the funds they need to grow.

As her business expanded, Hanna focused on hiring and training more women, many without prior carpentry experience and others from Technical and Vocational Education and Training programs. Although carpentry is traditionally a male-dominated field in Ethiopia, 75% of Hanna’s 45 employees are now women who thus contribute to the country’s growth while supporting their families.

"It was important for me to create opportunities for women in this field," Hanna explains. "There is no reason why they shouldn’t be part of the industry."

Supporting Women in Engineering and Construction

Addisalem Eshete runs a consultancy firm specializing in road construction design and monitoring, another male-dominated sector. After over two decades in the industry, she founded Sound Engineering Consultancy in 2018 to ensure that infrastructure projects meet the required standards.

"When I started, there were few women in leadership roles in construction," she says. "I wanted to change that."

Addisalem’s interest in engineering began in childhood. She has designed road networks at federal, regional, and local levels, including highways and city infrastructure. Her work spans road design, project management, and the fabrication of materials for roadworks.

One of her biggest challenges was securing the financing needed to grow her business. Despite her expertise, banks were reluctant to lend without collateral.

Through the Women Entrepreneurs Development Project (WEDP), a World Bank-funded initiative for women-led businesses, Addisalem secured financing to purchase a business vehicle. This investment improved her licensing grade, enabling her to bid on larger projects and enhancing her competitiveness. Over time, she took out two additional loans to upgrade her equipment and licensing, both of which she has now fully repaid. Starting with just five employees, her business has developed to employ 100 people.

Since its launch in 2012, WEDP has provided loans to about 30,000 women across Ethiopia and trained over 40,000 in business management skills, helping businesses scale operations. WEDP channels wholesale loans to Participating Financial Institutions (PFIs), which then on-lend to women-owned MSMEs. Loan amounts typically average $10,000, with repayment terms ranging from 24 to 48 months.

“The World Bank’s investment in SMEs and women entrepreneurs is recognition that empowering women and SMEs is critical to economic growth, job creation, and fostering innovation,” said Marlon Rolston Rawlins, Task Team Lead of WEDP and the Ethiopia SME Finance Project. “By providing access to finance, training, and resources, we help unlock the potential of women and SMEs, leading to more inclusive and sustainable development outcomes.”

At first, Addisalem was apprehensive about taking on debt. “But once I learned to manage payments and use the funds wisely, my confidence grew," she says. "The loan amounts increased, and I’m proud to say I’ve now paid off all my loans."

Expanding Access to Finance for Women Entrepreneurs

Studies show that firms benefiting from WEDP loans enjoy higher profits by approximately 30% and hire 50% more employees than similar firms that did not receive such loans. The experiences of Hanna and Addisalem underscore the importance of access to finance in helping women-led businesses thrive, especially in industries where women are underrepresented, so that these women entrepreneurs can contribute to economic dynamism and growth while supporting their families. Programs like the Ethiopia SME Finance Project and WEDP have supported tens of thousands of women across the country, enabling them to invest in equipment, expand their operations, and create jobs for men and women alike.

Ethiopia’s women entrepreneurs are not alone in this. Research from the World Bank’s Africa Gender Innovation Lab shows that men worldwide tend to operate businesses in more profitable industries. Helping women entrepreneurs break into sectors dominated by men is one key strategy to boost their income, increase employment, and create new opportunities for all.

The World Bank has implemented innovative approaches to finance women entrepreneurs through these programs by utilizing technology and alternative credit assessment methods, including psychometrics-based lending, cash flow-based lending, and digital working capital loans. These innovative approaches have provided financing to women who ordinarily would not have had access to finance and encouraged the development of new and innovative financial products, contributing to the overall goal of expanding access to finance for entrepreneurs in Ethiopia.

These programs go beyond financing: they offer training in business management and financial literacy, thus equipping entrepreneurs with the tools they need to make informed decisions as they grow their businesses and also support financial infrastructure that helps increase access to finance. This is especially important in Ethiopia, where only 7% of adults who borrow money do so from regulated financial institutions, leaving many without access to formal credit.

For Hanna and Addisalem, success extends beyond their own achievements. By creating opportunities for other women, they are challenging stereotypes about what women can achieve in business and industry.

"When I see my payroll, I feel proud knowing how many women’s lives and their families I am impacting," Hanna reflects. "This gives real meaning to the work we do."