Ethiopia is set to remove its long-standing cap on bank lending, a reform expected to release 1.3 trillion birr (US$ 21.9 billion) into the economy. This policy shift aims to expand credit supply and broaden financial access for businesses and households.

• The new lending volume represents a 500 billion birr increase compared to last year, ending years of quantitative restrictions that capped annual credit growth at 18%.
• Finance Minister Eyob Tekalign confirmed the move, emphasizing that safeguards are in place to prevent runaway inflation, with the Ministry of Finance working closely with the National Bank of Ethiopia (NBE).
• The reform is expected to unlock financing for critical sectors like manufacturing, construction, and agriculture, reflecting a transition to a modern, market-driven framework in line with International Monetary Fund (IMF) recommendations.