The Ethiopian Capital Market Authority (ECMA) has licensed five new capital market service providers (CMSPs), including the first investment banks.

The ECMA said the licensing “marks a historic milestone” that would “diversify and strengthen” the capital market by offering services such as securities brokerage, investment advisory, and capital raising, APA News reported. Previously, only investment advisers were licensed providers.

The new licenses granted designated services are CBE Capital S.C. (investment banker), Wegagen Capital Investment Bank S.C. (investment banker), Ethio-Fidelity Securities S.C. (securities dealer), HST Investment Advisory Services PLC for (securities investment advisor) and Equation Securities Investment Advisor PLC (securities investment advisor).

Previously, the Ethiopian capital market has been limited to four licensed service providers, all of which have operated solely as investment advisers, according to state news agency ENA.

ECMA director-general Hana Tehelku the expansion helps lay the groundwork for a more mature and competitive capital market, raising huge capital and investment opportunities, both for local and international investors, stressing that that their operations would be critical to fostering investor confidence and increasing market liquidity.

The Ethiopian Securities Exchange (ESX) was granted key licences from the ECMA in December 2024 to establish the nation’s first organised securities exchange and an over-the-counter (OTC) market.