Finance for All - African Experts seek breakthrough

A regional conference held in Congo Brazzaville yesterday with emphasis on reducing the burden of loan guarantees and reforming legal and institutional frameworks.

Legal and institutional reforms put in place by countries of the Central African Sub-region have been described as complex and in no way contributing to the regions desire for sustained economic growth and its much desired drive to attain middle-income economies. Experts meeting in a regional conference in Brazzaville Congo yesterday 23 March, 2015 were unanimous that governments need to draw up coherent national strategies to favour access to finances by all.

The strategies are expected to reflect the realities of each country. The conference theme, "Finance For All: Promoting Financial Inclusion in Central Africa," was opportunity for the over 200 participants to reflect on the risk of restricting access to finances to the growth of economies and how to frame up strategies that could facilitate access to loans by all, by reducing the burden of loan guarantees.

Declaring open the Brazzaville conference, organized by the International Monetary Fund and the Bank of Central African States in support of the government of Congo, the Congolese Minister of State, Minister of the Economy, Finance, Planning, Portfolio and Integration, Gilbert Ondongo, stressed that in order to reduce poverty and stimulate growth in the sub-region, access to the finances be it through loans was indispensable in the nearest future.

According to the Banking Commission of Central Africa, COBAC, the volume of loans since 2000 has increased with loan beneficiaries in terms of adults in the CEMAC zone at 1.8 and 1.9 per cent. Experts blame this weak adherence to the insurmountable loan guarantees.

Gilbert Ondongo sees the development of financial services adapted to the challenging times like mobile banking, personalized micro-loans and micro-assurance as breakthrough. According to the Congolese Minister, in late 2012, the rate of banking in the Central African Sub-region stood at 5 to 7 per cent against 50 to 60 per cent in North Africa.

The ratio of private loans to the public Investment Budget stands below 10 per cent as against 142 per cent in South Africa, 127 in China, 30 per cent in Senegal and 20 per cent in Cote D'Ivoire.

The Governor of BEAC, Lucas Abaga Nchama, said in spite of the appreciable economic strides made by countries of the sub-region and which in most cases stood at 5 per cent in the last decades, the low level of financial accessibility to households and Small and Medium-sized Enterprises is still blocking speedy growth.

The concern of BEAC and other central banks of the sub-region like the governments is its interest to develop a solid, stable and viable financial sector that is capable of playing its role of prompting growth and improving the livelihood of persons.

Lucas Abaga Nchama said BEAC, in its statutory mission was not folding arms to see economies of the sub-region stagnate but was gradually and surely implementing life-changing reforms to favour access to finances like the creation of a guarantee fund.

According to the Deputy Director of the International Monetary Fund for Africa, Anne Marie Gulde-Wolf, access to finances permits the vulnerable in society to face liquidity constraints, offers small and Medium-sized enterprises to finance development projects and by so doing favours inclusive economic growth while bridging the equity and poverty gabs.