The Ethiopian Deposit Insurance Fund (EDIF) collected 2.61 billion birr in deposit insurance premiums during the first quarter of the fiscal year, meeting its quarterly target and recording a 25.48 per cent increase compared with the same period last year.
The Fund attributed the increase primarily to growth in deposits held by member banks and microfinance institutions, according to its first-quarter financial performance report.
The latest collections bring cumulative premium receipts to 26.03 billion birr since the Fund began operations. Of this amount, 23.55 billion birr came from conventional deposits and 2.48 billion birr from interest-free deposits.
Private commercial banks accounted for the largest share of cumulative premium contributions, providing 13.17 billion birr, or 50.60 per cent of the total.
The Commercial Bank of Ethiopia contributed 12.55 billion birr, representing approximately 48.1 per cent, while microfinance institutions contributed 310 million birr, or 1.19 per cent.
Premium contributions form part of the financial resources the Fund accumulates to compensate eligible depositors when a covered financial institution fails.
EDIF also reported continued investment of its accumulated resources in government treasury bills and Mudarabah investment accounts.
Its total investment portfolio reached 27.24 billion birr, comprising 24.88 billion birr in government treasury bills and 2.36 billion birr in Mudarabah accounts.
The Fund said it has generated cumulative investment income of 4.97 billion birr since commencing operations.
Investment returns supplement premium collections and help strengthen the Fund’s capacity to meet potential obligations to depositors.
EDIF has been operational for more than three years, providing deposit insurance for individuals and businesses holding funds in member banks and microfinance institutions.
Under the existing arrangement, the Fund provides compensation of up to 100,000 birr per depositor if a covered financial institution fails.
The scheme is intended to protect eligible depositors and strengthen public confidence in the banking and microfinance sectors.
The first-quarter results show growth in both premium collections and invested resources as the Fund continues to build its financial capacity. Its ability to meet future obligations will also depend on effective investment management and the financial soundness of participating institutions.
