Agricultural finance

Outstanding loans of banks and the Development Bank of Ethiopia (DBE) to agriculture stood at ETB 166.3 billion on 30 June 2025, about US$1.23 billion at the end-of-June rate of 135.37 birr per dollar (own calculation), up 58.1% from ETB 105.1 billion a year earlier¹². Agriculture accounted for 8.6% of total outstanding credit of ETB 1.94 trillion, which fell by 9.6% in 2024/25 when corporate bonds were converted into government bonds¹. The agricultural stock was close to ETB 20 billion each year from 2015/16 to 2018/19, rose to ETB 31.8 billion in 2020/21, ETB 52.0 billion in 2021/22 and ETB 93.4 billion in 2022/23³⁴⁵⁶⁷. In 2021/22 agriculture held 3.3% of outstanding credit and received 5.0% of the loans disbursed (own calculations)⁶.

Disbursements rose faster than the stock in 2024/25, by 71.2%¹. Banks and DBE disbursed ETB 183.6 billion to agriculture in 2024/25 and collected ETB 138.1 billion, and agriculture took 22.3% of all new loans, ahead of domestic trade with 21.3%¹. The share of disbursements was 23.2% in 2023/24⁷. The National Agri-Finance Implementation Roadmap (NAFIR) of July 2025 notes that the Commercial Bank of Ethiopia (CBE) fertiliser import financing scheme accounted for nearly 70% of reported agricultural loan disbursements in 2023/24, and that agriculture's share of bank disbursements was about 8% excluding the scheme⁸.

In dollars the stock fell from US$1.83 billion at the end of June 2024 to US$1.23 billion at the end of June 2025 (own calculation), because the birr moved from 57.33 to 135.37 per dollar after the exchange rate reform of 29 July 2024²⁹. The dollar series therefore breaks in July 2024.

On 30 June 2025 international trade held ETB 420.5 billion of outstanding bank loans, manufacturing ETB 365.4 billion and domestic trade ETB 344.3 billion, against ETB 166.3 billion for agriculture¹. Ethiopia had 32 banks at that date, 31 commercial banks with 13,120 branches and one development bank with 104 branches¹⁶. The NBE Annual Report 2024/25 gives a total of 12,590 bank branches at the same date, a count that differs from the Financial Stability Report¹. Commercial banks alone, excluding DBE, held ETB 156.2 billion of loans to agriculture at the end of June 2025, 8.5% of their loans, against ETB 95.1 billion or 6.3% a year earlier, and their non-performing loan ratio for all sectors was 3.1%¹⁶.

CBE, the state-owned commercial bank, reported gross loans to agriculture of ETB 35.5 billion at 30 June 2024, 7.7% of its gross loans (own calculation), and earmarked ETB 77.4 billion of the ETB 218.2 billion it disbursed in 2023/24 for fertiliser imports¹⁷. DBE held loans and bonds of ETB 153.6 billion and a capital adequacy ratio of 25.9% at the end of June 2025¹⁶. In October 2026 DBE offers lease financing of new capital goods to small and medium enterprises with capital of ETB 0.5 million to ETB 9 million, and lists horticulture, dairy, poultry, coffee processing and edible oil among eligible areas¹⁸. Its agricultural loan book and non-performing loan ratio were not found in a readable official source¹⁹.

In August 2023 the NBE Board limited credit growth to 14% for the fiscal year ending 30 June 2024 and set targets of inflation below 20% by June 2024 and below 10% by June 2025²¹. On 9 July 2024 the NBE moved to an interest-rate based framework with a National Bank Rate (NBR) of 15% and standing facilities at the NBR plus or minus 3 percentage points, noting that commercial bank lending rates were “in the range of 16-20 percent for most loan categories”²². On 29 July 2024 it introduced a market-based exchange rate under Directive FXD/01/2024⁹. The Directive required exporters to convert 50% of repatriated export proceeds into birr²³, and on 13 July 2026 the NBE Board approved a cut of this surrender requirement on goods exports to 30%²⁴.

The Monetary Policy Committee held the NBR at 15% at its meetings from December 2024 to March 2026, raised the credit growth cap to 18% in December 2024 and to 24% for 2025/26 in September 2025, and in December 2025 raised the reserve requirement to 10% and ended the minimum deposit rate²⁵²⁶²⁷. On 13 July 2026 it removed the credit cap in full and raised the policy rate from 15% to 16%²⁴¹⁰. Outstanding bank credit grew by 45.3% year on year to the end of February 2026²⁸. Headline inflation was 9.7% in February 2026 and 13.4% in May 2026²⁸²⁴.

The average lending rate was 14.3% each year from 2020/21 to 2023/24 and 15.8% in 2024/25, while the average savings deposit rate stayed at 8.0%¹. The real lending rate turned positive at 1.9% in 2024/25 after -20.5% in 2021/22 and -5.7% in 2023/24¹.

The Council of Ministers approved the draft Banking Business Proclamation on 14 June 2024, and the NBE publishes the enacted text as Banking Business Proclamation No. 1360/2025²⁹³⁵. The NBE issued a licensing directive for banking business and representative offices (SBB/94/2025) that sets the requirements foreign banks entering the market must meet, and a 2026 directive on bank branches in special economic zones that applies to foreign bank subsidiaries and branches licensed by the NBE¹⁶³⁶³⁷. In April 2026 the Governor named opening the sector to foreign investment as a priority for the next phase of reform, and no NBE announcement of a licence granted to a foreign bank was found by 19 October 2026³⁸.

The 59 microfinance institutions (MFIs) operating at the end of June 2025 had 1,238 branches, 752,387 loan clients and 7.1 million savers, gross loans of ETB 48.9 billion and deposits of ETB 41.8 billion¹⁶. The NBE Annual Report 2024/25 counts 57 microfinance institutions at the same date¹, and the NBE register page listed 56 on 19 October 2026³⁹. Their loans to agriculture rose from ETB 5.8 billion in June 2021 to ETB 8.1 billion in June 2025, while agriculture's share of MFI loans fell from 28.6% to 16.6% (own calculation)¹⁶. In 2023/24 rural savings and credit cooperatives (RuSACCOs) lent ETB 13.2 billion, 25.3% of agri-finance supply excluding the CBE fertiliser scheme, and the Agricultural Transformation Institute had assessed nearly 4,000 RuSACCOs⁸. Under RUFIP-III, implemented by DBE, credit lines of ETB 378 million had reached 14 MFIs and 26 RuSACCOs by January 2025⁸.

Loans against pledged agricultural assets reached ETB 20.2 billion in 2023/24, of which ETB 18.5 billion was recorded in the NBE movable property registry, ETB 1.0 billion against rural land certificates and ETB 0.7 billion against warehouse receipts⁸. Of 221,367 movable assets registered in 2023/24, 1,563 were agricultural, of which 1,311 were machinery⁸. Lessors of capital goods held ETB 397.9 million of agricultural leases at the end of June 2025¹⁶.

Global Findex shows account ownership rising from 21.8% of adults in 2014 to 46.5% in 2022 and 48.8% in 2024, with 43.3% in rural areas and 73.2% in urban areas in 2024⁴⁰⁴¹. Formal borrowing fell from 10.7% of adults in 2017 to 2.6% in 2024, while 38.8% borrowed from family or friends in 2024⁴². The NBE estimated that nearly 63% of adults had an account at June 2025, on the basis of a demand-side triangulation forecast¹⁶. The National Financial Inclusion Strategy II set a target of 70% of adults with a formal account by 2025 and 500,000 smallholder farmers formally insured⁴³.

Mobile money accounts rose from 15.3 million in June 2021 to 135.9 million in June 2025, and agents from 35,964 to 540,421¹⁶. Ethio telecom reported 60.6 million telebirr customers for 2025/26 and ETB 19.51 billion of digital loans to 5.65 million customers, against 34.3 million subscribers and over ETB 4.1 billion of micro loans in 2022/23⁴⁴⁴⁵. In 2024, 9.5% of adults reported a mobile money account⁴¹.

The 19 insurance companies wrote gross premiums of ETB 41.1 billion in the year to June 2025, 92.5% in general insurance, and insurance penetration was 0.3%¹⁶. The NBE Annual Report 2024/25 counts 18 insurance companies at the end of June 2025, and the NBE register page listed 18 insurers and 1 reinsurer on 19 October 2026¹³⁹. Agricultural premiums are not published separately in the NBE reports read. NAFIR reports growth in livestock and floriculture insurance from four providers, the Insurance and Risk Finance Facility launched in 2024 by UNDP with the Ministry of Agriculture, and JICA and IFAD programmes on index-based crop insurance and agricultural risk management⁸. The World Bank DRIVE project, which offers pastoralists a package of savings, insurance and digital accounts, covered 894,400 pastoralists and dependents in Ethiopia on 10 October 2025, against a closing target of 500,000⁴⁶. The regional project was approved on 21 June 2022 with a commitment of US$360.5 million, made up of US$327.5 million of IDA financing and a US$33.0 million grant, and closes on 30 September 2027⁴⁷.