Ethiopia’s Financial Sector Assets Surge 35.5% to Br 6.89 Trillion
Ethiopia’s financial sector expanded substantially over the past year, with total assets climbing 35.5% to Br 6.89 trillion, while the number of licensed financial institutions increased by 23 to reach 152.
National Bank of Ethiopia (NBE) Governor Eyob Tekalign (PhD) disclosed the figures while speaking at a financial forum in Addis Ababa, pointing to continued expansion in financial intermediation as the country undertakes broad reforms to its financial system.
The sector’s growth was accompanied by a nearly 38% increase in deposits, indicating a significant expansion in funds mobilized through financial institutions.
Financial Sector Expansion at a Glance
| Indicator | Latest Position | Change / Benchmark |
| Total assets | Br 6.89 trillion | +35.5% |
| Financial-sector deposits | — | Nearly +38% |
| Licensed institutions | 152 | Up from 129 |
| Increase in licensed institutions | 23 | +17.8% |
| Capital adequacy ratio | 16.3% | Minimum: 8% |
| Non-performing loan ratio | 2.85% | Ceiling: 5% |
| Liquidity ratio | 34.47% | Above regulatory requirement |
The expansion in licensed institutions represents a 17.8% increase from the previous 129. The Governor did not break down the additional 23 institutions by type in his remarks.
The difference between the growth rates is also notable. While the number of licensed institutions increased by 17.8%, total sector assets grew by 35.5%, meaning the sector’s balance sheet expanded at roughly twice the rate of its institutional base.
The figures point to a financial system growing not only through the entry of new institutions but also through the expansion of the activities and balance sheets of institutions already operating in the market.
Capital Buffers Remain Above Regulatory Minimums
The sector also reported capital and liquidity ratios above the NBE’s regulatory requirements.
The capital adequacy ratio stood at 16.3%, compared with the regulatory minimum of 8%. This means the reported sector-wide ratio was more than twice the minimum requirement.
At the same time, the non-performing loan ratio was 2.85%, remaining below the 5% regulatory ceiling.
The sector’s liquidity ratio reached 34.47%, indicating that financial institutions were holding liquidity above the applicable regulatory requirement.
These indicators provide a snapshot of the sector’s reported capital, asset-quality and liquidity positions as its balance sheet continues to expand.
A Larger Financial System Amid Broader Reform
The expansion comes during a period of significant change in Ethiopia’s financial sector.
The NBE has been implementing reforms affecting monetary policy, foreign-exchange-market operations and financial-sector regulation, while the financial system itself continues to broaden through the entry of new institutions and the development of new financial-market activities.
The increase to 152 licensed institutions also reflects a more diverse financial-sector landscape, although the Governor did not specify how the 23 additional institutions are distributed among banks, insurance companies, microfinance institutions or other licensed financial entities.
For the financial sector, the combination of faster asset growth, rising deposits and a growing number of institutions increases the scale of financial intermediation taking place through the formal system.
At the same time, the reported capital, liquidity and non-performing-loan ratios will remain important indicators as the sector continues to expand.
With total assets now reaching Br 6.89 trillion, the latest figures underline how significantly Ethiopia’s financial system has grown—and the increasing scale of the sector that the NBE is required to supervise.
Source: EBR