The National Bank of Ethiopia's inaugural Financial Stability Report sheds light on an alarming degree of loan concentration among a powerful few. A mere 10 borrowers collectively account for nearly a quarter of all bank loans.
The report found these top ten borrowers from the banking industry monopolized 23.5 percent of total credit as of late June 2023. Even more concerning - this dominance has grown from 18.7 percent just one year ago.
Borrowers with exposures over 10 million Birr, a tiny 0.5 percent of clients, are virtual kings - controlling a staggering 73.7 percent of all loans from the banking system.
While a select elite few hold the financial sector in their grip, the report also revealed 99.8 percent of loans go to urban dwellers, leaving many in rural areas unserved.
Key financial metrics still indicate the industry is fundamentally robust, according to the central bank.
The NBE assessed commercial banks to be in sound financial health based on metrics such as capital adequacy ratios, liquidity positions and non-performing loan levels.
