Addis Abeba –The central bank has eased the annual credit growth restrictions on commercial banks, enabling financial institutions to extend more loans to their clients.
In a statement released on 31 December, 2024, the National Bank of Ethiopia (NBE) disclosed that the annual credit growth ceiling was raised from 14% to 18%.
The credit growth limit, introduced in August 2023, was part of the government’s strategy to curb inflation to below 20% by June 2024, with a further target of 10% by June 2025.
In its latest update, the NBE reported that year-on-year inflation had continued its downward trend, reaching a five-year low of 16.9% in November 2024. This was attributed to the “tightened stance of monetary policy” implemented in August 2023.
“Food inflation, though still elevated at 18.5%, has shown a broadly moderating trend for over a year, while non-food inflation registered a slight increase to 14.4% in November 2024,” the statement noted.
Since the introduction of the 14% cap on domestic credit growth, banking industry executives have voiced concerns over the restrictions, arguing that they limit borrowers’ access to loans from financial institutions. AS
