Finance and Poverty in Ethiopia: A Household-Level Analysis

The year 1992 marked a policy watershed in the Ethiopian financial sector, as well as the country’s economic policy at large. This was the period where a shift from a controlled to market-friendly policy regime was made. The new government continued with the policy of state ownership of major financial institutions, with major reforms such as operational autonomy and streamlining of some activities, expansion of credit and savings facilities, and adherence to prudent monetary and banking policy. In addition, the sector was, for the first time, opened to the private sector. The World Bank and the IMF supported the financial liberalization programme through the Structural Adjustment Programme (SAP), which started in late 1992.