Ethiopian banks’ loan disbursement grows 24 percent

NEWS- The 18 commercial banks in Ethiopia have disbursed a total loan of 221 billion birr (about $6.44 billion at the current exchange rate) to their customers during the first ten months of the budget year started July 2019.

Compared to the previous year the money the banks disbursed as loan as increased by 24 percent, according to Prime Minister Abiy Ahmed, who responded to question raised from the members of parliament on Monday. The banks have collected a total of 138 billion birr (about $4 billion) as loan payment from their customers. Compared to same period the previous year it has increased 14 percent.

The average non-performing loans of the 16 private banks Ethiopian banks in the last 10 months drops to 3.4 percent on average from 7.4 percent last year same period. “This is significant for the industry, and shows how the financial sector is healthy,” he said. He also stated that the nonperforming loan for the two state-owned Commercial Bank of Ethiopia and Development Bank of Ethiopia for the ten month period was 2 percent and 34 percent, respectively.

Prime Minister stated that the improvement in the financial sector has come as a result of the measures the government has taken to rescue the economy from the impacts of the global pandemic coronavirus. As one example he mentioned the 48 billion birr (close to $1.4 billion) the central bank injected recently into the commercial banks to avoid liquidity problem.

Prime Minister Abiy also stated that the total amount of money the banks have collected as saving from their customers has also increased to 87 billion birr (about 2.54 billion).