Ethiopia’s banking sector expanded credit to 2.42 trillion birr in the first half of the 2025/26 Ethiopian fiscal year, reflecting rapid balance-sheet growth as inflation eased and financial activity accelerated, according to the National Bank of Ethiopia.

The central bank presented its six-month performance report to the House of Peoples’ Representatives’ Standing Committee on Planning, Budget and Finance on Monday, outlining developments in credit growth, deposits, inflation and digital finance.

More than 94.5 percent of total outstanding loans were held by private enterprises, signalling sustained credit allocation toward the private sector. Overall bank lending grew by more than 45 percent compared with the same period a year earlier.

Deposit mobilisation also strengthened. Total deposits across the banking system reached 4.2 trillion birr, up 44.6 percent year on year, supported by rising account ownership and expanding financial access.

Price pressures eased during the period, with annual inflation slowing sharply to 9.7 percent, bringing headline inflation back to single digits. The country’s monetary authority said the outcome aligned with its fiscal-year objective of restoring price stability.

External inflows improved foreign exchange conditions. Net private remittances climbed to 4.6 billion US dollars, an increase of 36.5 percent from a year earlier, contributing to higher foreign currency availability within the banking system.

Digital finance activity expanded rapidly. The value of digital payments reached 14.56 trillion birr in the six-month period, nearly doubling from the previous year, while the number of digital accounts grew by more than 20 percent.

The currency issuer said its priorities for the remainder of the fiscal year include maintaining single-digit inflation, strengthening foreign exchange management, upgrading the digital finance framework, improving banking sector competitiveness and deepening policy coordination with public institutions.