Ethiopia: Bank credit to the private sector as percent of GDP, 1981 - 2008:
For that indicator, we provide data for Ethiopia from 1981 to 2008. The average value for Ethiopia during that period was 9.46 percent with a minimum of 1.47 percent in 1991 and a maximum of 20.45 percent in 2006.
The latest value from 2008 is 17.64 percent. For comparison, the world average in 2008 based on 177
countries is 49.59 percent.
See the global rankings for that indicator or
use the country comparator to compare trends over time.
Bank credit in Ethiopia and other countries is defined as the credit extended by the banking institutions to the private sector only: both firms and households. It does not include lending to the government.
Credit is essential for the economy to function well. It funds new investments and allows people to purchase houses, cars, and other items. Of course, excessive lending and borrowing usually end up in financial crises but, in principle, credit availability is good for economic development.
If the banking credit to the private sector is about 70 percent of GDP and more, then the country has a relatively well developed financial system. The amount of credit can even exceed 200 percent of GDP in some very advanced economies. In some poor countries, the credit could be less than 15 percent of GDP. In these countries, firms and households essentially do not have access to credit for investment and various purchases.
Definition: Domestic credit to private sector by banks refers to financial resources provided to the private sector by other depository corporations (deposit taking corporations except central banks), such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment. For some countries these claims include credit to public enterprises.