Commercial Bank of Ethiopia Revises Loan Interest Rates











Addis Ababa, Ethiopia – March 4, 2025 – The Commercial Bank of Ethiopia (CBE) has announced adjustments to its loan interest rates, effective March 7, 2025. The changes are part of broader financial sector reforms aimed at aligning lending practices with market conditions, improving financial inclusion, and ensuring the long-term sustainability of Ethiopia’s banking industry.

Overview of the Adjustments

The revised interest rates apply to a range of loan categories, including commercial, agricultural, residential, and personal loans. The bank states that these adjustments are designed to maintain competitiveness while supporting borrowers across different sectors. The new rates aim to reflect market trends, enhance accessibility, and provide businesses and individuals with more flexible financing options.

Key Changes in Loan Interest Rates

Agricultural Loans:



Short-term and long-term financing: 16.50%







Includes loans for fertilizer procurement and mechanized farming investments.

Short-term and long-term financing: 16.50%

Includes loans for fertilizer procurement and mechanized farming investments.

Commercial Loans:



Medium-term loans: 18.00%







Short-term loans: 15.50%







Overdraft facilities and trade financing solutions included in the revised rates.

Medium-term loans: 18.00%

Short-term loans: 15.50%

Overdraft facilities and trade financing solutions included in the revised rates.

Residential Condominium Loans:



40/60 financing scheme: 12.00%







20/80 scheme: 12.00%







10/90 scheme: 15.50%







Applicable to newly constructed and pre-existing condominium housing units.

40/60 financing scheme: 12.00%

20/80 scheme: 12.00%

10/90 scheme: 15.50%

Applicable to newly constructed and pre-existing condominium housing units.

Export Sector Loans:



Adjusted to 17.00% to promote the competitiveness of Ethiopian exports.







Includes financing for pre-shipment and post-shipment activities.

Adjusted to 17.00% to promote the competitiveness of Ethiopian exports.

Includes financing for pre-shipment and post-shipment activities.

Personal Loans:



Mortgage loans: 12.00%







Vehicle loans: 14.00%







Personal loans for employees of foreign currency-generating organizations: 7.00%







Consumer loans tailored to meet individual financial needs.

Mortgage loans: 12.00%

Vehicle loans: 14.00%

Personal loans for employees of foreign currency-generating organizations: 7.00%

Consumer loans tailored to meet individual financial needs.

Strategic Objectives and Market Impact

The CBE has indicated that the interest rate adjustments are part of ongoing efforts to optimize credit accessibility while maintaining financial sustainability. The move is expected to ease borrowing costs for priority sectors, such as agriculture, trade, and housing, while ensuring responsible lending practices.

The bank has also highlighted additional measures to improve efficiency, including reducing administrative costs, enhancing digital banking services, and streamlining lending procedures. These steps align with Ethiopia’s broader financial sector reforms, which aim to foster a competitive and modern banking industry capable of attracting local and international investment.

Economists have noted that while these adjustments may increase borrowing in key sectors, the impact will depend on market demand and the overall economic climate. The private sector, particularly small and medium-sized enterprises (SMEs), is expected to benefit from lowered lending rates in specific categories, potentially driving business growth and job creation.

Sector Developments and Future Outlook

Ethiopia’s financial sector is undergoing policy shifts to encourage investment and modernize banking operations. The government has been working on various initiatives, including expanding financial access, encouraging digital banking adoption, and opening up the banking industry to foreign investors.

The CBE’s interest rate adjustments reflect these broader economic strategies, ensuring that financial services remain adaptable to changing market conditions. With Ethiopia’s banking sector evolving, the role of state-owned banks like CBE remains crucial in facilitating credit access and supporting economic development.

Industry experts suggest that further policy reforms and macroeconomic stability will be key factors in determining the long-term impact of these rate adjustments. As financial markets continue to develop, businesses and individuals are encouraged to stay informed on how evolving banking policies affect their financial decisions.

The bank encourages customers to visit its branches or official website for detailed information regarding the revised loan terms and conditions.

For further updates on Ethiopia’s banking sector and economic developments, stay informed with the latest reports.