By Benadeta Mwaura - Reporter
1 January 2026 - Equity Group Holdings is deepening its regional footprint with a concerted push into Ethiopia’s newly liberalised banking sector, part of a broader strategy to transform itself from a domestic lender into a pan-African financial services powerhouse.
This expansion drive, CEO Dr James Mwangi says, is underpinned by expectations of lower lending rates, rising investment flows in East Africa and a strong outlook for 2026 that balances private-sector growth with emerging market opportunities.
Dr Mwangi outlined how Equity plans to navigate new markets, notably Ethiopia, while also managing the cost of credit, a critical factor for business and consumer borrowing in Kenya and across the region.
“We have had a representative office in Ethiopia for seven years and now see a pathway to entering with a full banking licence, which we are actively exploring,” Mwangi said, underscoring the significance of recent regulatory reforms in Addis Ababa.
Ethiopia’s banking sector remained closed to foreign lenders until regulatory changes in late 2024 and early 2025 opened the market to international participation.
The National Bank of Ethiopia revised its Banking Business Proclamation, enabling foreign banks to establish subsidiaries, branches or acquire stakes in local lenders, a major shift in a country with over 120 million people and low banking penetration.
Dr Mwangi’s engagement with Ethiopian authorities mirrors this changing landscape.
He and senior Equity officials have held discussions with the Ethiopian Investment Commission (EIC), led by Commissioner Dr Zeleke Temesgen, to secure regulatory clarity and cooperation. In earlier statements, Dr Temesgen described Ethiopia as “a preferred destination for companies wishing to engage in the financial sector” and assured that the Commission is “ready to provide the necessary support … to facilitate the bank’s investment in Ethiopia.”
Equity’s move follows earlier bids by regional peers such as KCB Group, which is also pursuing entry into Ethiopia’s market, with discussions around partner acquisitions and regulatory exemptions under the new framework.
Dr Mwangi said Equity’s long-term vision is not just about expanding physical presence but evolving into a comprehensive financial group offering banking, insurance and investment services across multiple African markets.
“Our plan is a recognition that development in the region will be private sector-led,” he said. The bank’s Africa Recovery and Resilience Plan, he explained, is built on pillars aimed at boosting agricultural productivity, accelerating resource beneficiation and attracting global investment while empowering SMEs.
Equity has already established a presence in East and Central Africa, including in Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo, and aims to operate in 15 countries by 2030 through organic growth and mergers and acquisitions.
Ethiopia is a priority for the next phase of expansion, Dr Mwangi noted.
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Given its large population, significant infrastructure investment and increasing integration into regional trade, the country presents a market with high growth potential, one that could significantly enlarge Equity’s customer base and strategic reach.
Another major theme in the CEO’s outlook was the cost of credit and its impact on growth. With the Central Bank of Kenya (CBK) having cut key rates several times in 2025, lending costs across the market have begun to adjust.
Equity has been proactive in reflecting these changes in its pricing, tied to the CBK’s new interest-rate pricing mechanism, which links lending rates more transparently to monetary policy signals.
Mwangi emphasised that lower interest rates are expected to provide predictability for borrowers and stimulate economic activity by reducing the cost of credit for households and businesses alike, an outcome Equity is keen to support across all its markets.
Looking into 2026, Dr Mwangi expressed optimism about the regional economic landscape, pointing to declining inflation, initial interest rate cuts in major markets and weakening of the U.S. dollar as positive signals for investment attractiveness.
He also cited peace initiatives in the Democratic Republic of Congo and heightened regional cooperation as ingredients for sustained growth.
“These points point to a year with almost all the ingredients for sustained rapid growth in the region,” he said, highlighting Equity’s confidence in the alignment of its strategy with broader economic trends.
Beyond banking, Equity’s vision includes insurance, now offered through life, general and health products, as part of a diversified financial services ecosystem that supports customer needs from lending and savings to protection.
Equity’s push into Ethiopia reflects a broader shift in East Africa’s financial sector as regional champions seek to scale across borders following decades of relative protectionism.
While competition will likely intensify, the move underscores a belief among regional financiers that intraregional trade, demography and economic reforms provide fertile ground for cross-border banking growth.
With Ethiopia’s economy and financial liberalisation gathering pace, the stage is set for Kenyan banks like Equity and KCB to embed themselves deeper into a market that has long remained out of reach.
If successful, these moves could reshape the banking maps of East and Central Africa in the decade ahead.
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