The Ethiopian Deposit Insurance Fund (EDIF) has announced that it is considering increasing the maximum amount of insurance compensation paid to depositors when a bank or microfinance institution becomes insolvent.
Currently, the Fund provides deposit insurance coverage of up to Birr 100,000 per depositor in the event of bankruptcy. However, EDIF officials indicated that discussions are underway to revise the ceiling upward, following growing calls to enhance depositor protection in line with current economic realities.
Merga Wakoya, Operations Director at the Fund, said EDIF is presently paying depositor insurance compensation to depositors of a microfinance institution that has recently gone bankrupt. He noted that the Fund was established to protect both individuals and organizations that deposit money in banks and microfinance institutions operating in Ethiopia.
According to the Fund, nearly three years after its establishment, total premiums collected from member financial institutions have reached Birr 17.80 billion. Of this total, Birr 16.20 billion was collected from regular deposits, while the remaining Birr 1.6 billion was generated from interest free deposit contributions.
Merga stated that Birr 8.97 billion was collected from private banks, Birr 8.63 billion from the Commercial Bank of Ethiopia, and Birr 0.21 billion from microfinance institutions.
He further disclosed that EDIF collected Birr 3.74 billion in premiums during the first six months of the 2025/26 fiscal year, reflecting increased participation and contribution from member institutions.
Merga explained that banks and microfinance institutions contribute premiums to the Fund in the form of deposits. In the event of bankruptcy, EDIF pays insured depositors up to Birr 100,000, while any remaining unpaid balance is expected to be settled through liquidation and sale of the failed institution’s assets.
He added that while the current insurance limit remains in place, EDIF is actively reviewing proposals to increase the payout amount beyond Birr 100,000.
The Fund also reported that its total investments have reached Birr 19.77 billion.
Source: Sheger FM 102.1
