Ethiopia has secured a $700 million loan from the World Bank to bolster financial sector reforms aimed at enhancing the stability and sustainability of its banking system. The agreement was finalized on December 31, 2024, between the Ministry of Finance and the World Bank.
The Financial Sector Strengthening Project (FSSP), supported by this funding, focuses on critical reforms, including recapitalization of the Commercial Bank of Ethiopia (CBE) and the Development Bank of Ethiopia (DBE). The project aligns with Ethiopia’s ongoing efforts to modernize and liberalize its financial sector.
A significant portion of the loan will address non-performing loans, recapitalize state-owned banks, and ensure compliance with capital adequacy standards. Additionally, it will strengthen the regulatory and supervisory framework for banking operations, enhancing financial stability.
The initiative also aims to create greater access to capital, fostering job creation and economic growth. The agreement was signed by Finance Minister Ahmed Shide and Maryam Salim, the World Bank’s Country Director for Ethiopia, Eritrea, Sudan, and South Sudan.