Africa: Experts highlight paradox between banks' excess liquidity and the private sector's poor access to credit
The International Finance Forum in Sub-Saharan Africa, which was held from November 20th to 22nd in Douala, Cameroon, attempted to resolve the paradox between banks' excess liquidity and the private sector's low access to credit in Africa.The International Finance Forum in Sub-Saharan Africa, which was held from November 20th to 22nd in Douala, Cameroon, attempted to resolve the paradox between
excess liquidity and the private sector's low access to credit in Africa.
Experts stated that most African banks are in excess liquidity, with figures reaching CFAF1 trillion in the CEMAC region (€1.5 billion).They stated that the abundance of cash held by banks contrasts with the decline in loans granted to the economy.
Several reasons have been advanced to explain this paradox, including a lack of financial education and the impossibility for many companies to provide the guarantees required by banks for loans.
The forum has given itself the objective to promote and encourage the financing of small and medium-sized enterprises in Africa.
"Eighty percent of the private market is not covered by banks, while the latter is seen as an engine of growth for most sub-Saharan African countries and represents 50 percent of GDP and employment,"
said an expert quoted by the newspaper Le Journal de l'Économie Sénégalaise.
Participants called on governments to promote the integration and dissemination of new concepts and tools of modern finance such as investment funds, sovereign wealth funds and Islamic finance mechanisms.