Equity Bank Group has taken a major step toward expanding into Ethiopia after its chief executive Dr. James Mwangi held talks with Ethiopian Investment Commission (EIC) Commissioner Dr. Zeleke Temesgen on Friday.

With over 120 million people and one of the lowest banking penetration rates in Africa, Ethiopia has become a key frontier market for East African lenders seeking growth beyond their home markets.

Equity’s move comes as rival KCB Group also positions to enter Ethiopia’s banking sector following recent regulatory changes.

Ethiopia passed the Banking Business Proclamation No. 1360/2024 in December, allowing foreign banks to set up subsidiaries, branches, or representative offices, and to acquire equity stakes in local lenders. In June 2025, the NBE issued a directive enabling foreign banks to start submitting applications.

The reforms mark Ethiopia’s most significant financial sector opening in decades. They are accompanied by broader macroeconomic changes, including a shift to interest rate-based monetary policy, steps to ease foreign exchange controls, and the launch of the Ethiopian Securities Exchange (ESX).