Front Matter Page
IMF Country Report No. 20/323
THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA: TECHNICAL ASSISTANCE REPORT—FINANCIAL SOUNDNESS INDICATORS MISSION
December 2020
This paper on The Federal Democratic Republic of Ethiopia was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with The Federal Democratic Republic of Ethiopia. It is based on the information available at the time it was completed in September 2020.
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Front Matter Page
The Federal Democratic Republic of Ethiopia
Technical Assistance Report on the Financial Soundness Indicators Mission (June 15–July 10, 2020)
September 2020
Prepared by Kazuko Shirono, Brian Kwok Chung Yee, Mahmut Kutlukaya, Meraj Allahrakha
The contents of this report constitute technical advice provided by the staff of the International Monetary Fund (IMF) to the authorities of Ethiopia (the “TA recipient”) in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff, and other technical assistance providers and donors with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information). Publication or Disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and donors with legitimate interest, shall require the explicit consent of the TA recipient and the IMF’s Statistics Department.
Contents
Glossary
SUMMARY OF MISSION OUTCOMES AND PRIORITY RECOMMENDATIONS
DETAILED ACTION PLAN
INTRODUCTION
A. Background
B. Ethiopia’s Financial System
DETAILED TECHNICAL ASSESSMENT AND RECOMMENDATIONS
A. Consolidation Basis and Institutional Coverage
B. Accounting and Regulatory Frameworks Underlying the FSI Data
C. Source Data
D. Compilation Framework
E. New FSI Report Forms
F. FSI Metadata
G. FSI Data and Metadata Reporting
H. FSIs for Other Sectors
I. Resources, Training, and Technical Cooperation
J. Other Issues
BOX
1. The Development Bank of Ethiopia
TABLES
1. Priority Recommendations
2. The Financial Sector in Ethiopia
3. Loans Classification and Provisioning Rules for Commercial Banks
4. Summary of Risk-Weighted Coefficients by Types of Claims
5. Loans Classification and Provisioning Rules for Medium and Long-Term Loans Granted by the DBE
APPENDICES
I. Financial Soundness Indicators
II. Officials Met During the Mission
III. Summary of Recommended Amendments to the FSI Definitions
IV. FSI Metadata for Deposit Takers
Glossary
| AFR |
IMF’s African Department |
| BSD |
Bank Supervision Directorate |
| BSA |
Bank Supervision Application |
| CDM |
Concentration and Distribution Measures |
| CGFC |
Capital Goods Finance Companies |
| CBCSDI |
Cross-border, Cross-sector, Domestically Incorporated consolidated basis |
| DBE |
Development Bank of Ethiopia |
| DC |
Domestic Consolidation basis |
| DCCBCS |
Domestic Controlled, Cross-border, Cross-sector consolidation basis |
| DL |
Domestic location |
| DT |
Deposit taker |
| FAS |
Financial Access Survey |
| FCA |
Federal Cooperative Agency |
| FSI |
Financial soundness indicator |
| FSI Guide |
Financial Soundness Indicators Compilation Guide |
| FX |
Foreign exchange |
| IAS |
International Accounting Standard |
| ISIC |
International Standard Industrial Classification of All Economic Sector Activities |
| IFRS |
International Financial Reporting Standard |
| IMF |
International Monetary Fund |
| ISD |
Insurance Supervision Directorate |
| MFAD |
Monetary and Financial Analysis Directorate |
| MFI |
Microfinance Institutions |
| MSD |
Microfinance Institutions Supervision Directorate |
| NBE |
National Bank of Ethiopia |
| NBFI |
Nonbank financial institutions |
| NPL |
Nonperforming loan |
| OCI |
Other Comprehensive Income |
| ROA |
Return on assets |
| ROE |
Return on equity |
| RWA |
Risk-weighted asset |
| SNA |
System of National Accounts |
| SRF |
Standardized Report Forms |
| STA |
IMF’s Statistics Department |
| TA |
Technical assistance |