Ethiopia is opening its banking sector to foreign players for the first time in five decades, drawing swift interest from Kenya's biggest lenders and regional heavyweights.
Ethiopia's banking market, once sealed off to foreign participation, has become the continent's next major frontier. Following a series of sweeping reforms, the country is now inviting regional banks to invest and compete in one of Africas least penetrated - and potentially one of the continents largest due to its population - financial markets.
In a June 2025 directive, the National Bank of Ethiopia NBE formally allowed foreign banks to apply for local licences. The change follows years of incremental liberalisation under Prime Minister Abiy Ahmed's administration, including the partial float of the birr in 2024 and the January 2025 launch of the Ethiopian Securities Exchange. In line with the Banking Business Proclamation No. 1360/2024, passed in December 2024 and implemented in 2025, foreign lenders can now operate through subsidiaries, branches, or equity acquisitions in existing banks.