Economy
EDIF weighs shift to target fund model amid T-bill yield drops
Capital Ethiopia · 2 weeks ago · Read the Full Story on Capital Ethiopia
AI SUMMARY
The Ethiopian Deposit Insurance Fund is exploring a transition from a flat contribution rate to a risk-based target fund model amid declining Treasury bill yields.
- The Ethiopian Deposit Insurance Fund (EDIF) is considering replacing its flat 0.3 percent annual contribution rate with a dynamic target fund model based on institutional risk profiles.
- The proposed model would establish a target reserve ratio, allowing the fund to pause collections, issue rebates, or adjust premiums once thresholds are met.
- Weighted-average yields on government securities fell from 15.59 percent in September 2025 to 5.79 percent in September 2026, impacting fund investment revenue.
- EDIF's accumulated reserve balances reached 45.57 billion birr by late 2026, with the fund continuing to guarantee deposits up to 100,000 birr per depositor.
- The fund recently initiated its first statutory payout process following the liquidation of a microfinance institution whose license was revoked by the central bank.
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