Madagascar: 13 percent increase in the volume of outstanding loans

Jan 26, 2012

The volume of outstanding loans of the Malagasy banking sector in 2011 has witnessed a growth comprised between four and five percent, announced Philippe Lame, CEO of BFV Société Générale.

The volume of outstanding loans of the Malagasy banking sector in 2011 has witnessed a growth comprised between four and five percent, announced Philippe Lame, CEO of BFV Société Générale.

This is a 13 percent increase compared to 2010, he was quoted by L'Express de Madagascar as saying on Saturday (January 21st)

He added that to increase these results, there are several initiatives that all actors should take part such as the development of the formal sector by the State and the promotion of savings and deposits.

"Currently the majority of deposits are on a short term [basis], deposits that are hardly recyclable as credit. This is one of the weak point of the banking sector for investment funding," he told the news source.

Madagascar's financial sector is little developed. The penetration rate is comprised between three and five percent.

According to Les Nouvelles newspaper, banks do not invest in rural areas, because of the high costs. This is why only ten percent of the adult population has access to financial services.

However, 70 percent of the adult population owns a mobile phone. The potential for increasing access to credit and bank account openings via mobile banking is therefore important.

Airtel Madagascar and Bank of Afrika (BOA) have met on January 12th in order to introduce a new range of mobile banking services: Airtel Money, which will allow users to transfer money via mobile phone, but also open a savings account and make purchases, Le Courrier de Madagascar reports.

It gives all Airtel users the possibility to access a bank account from their mobile phone via BOA.ADNFCR-2976-ID-801276115-ADNFCR