The captain of Guaranty Trust Bank (GTB) has envisaged a brighter and stronger future for Gambia’s banking sector.
In the lens of MD Bolaji Ayodele, the bright future of the country’s banking sector could be discerned from many strategic steps taken by banking players and operators in the financial industry, as well as the exponential growth registered by the sector over the last ten years.
We couldn’t agree with him more, since the results and performance of the banking sector are quite telling.
For instance, the Gambia Bankers Association (GBA), established some few years ago, has today become a strong pillar in boosting the growth and development of the industry.
The GBA in turn has worked hard to set up a promising training institute for bank employees and potential bankers in the country.
The Institute of Bankers of The Gambia, which started with just 3 students in 2011, was having 240 students by end of 2015.
This is indication of a brighter future for the banking sector being fueled by the institute, which is out to provide quality and professional training in banking and finance and to determine the standard of knowledge and skills to be attained by persons seeking to become members of the banking profession.
The Gambia’s banking industry had experienced rapid growth over the past few years, confirmed the Governor of the Central Bank of The Gambia, Amadou Colley in his recent statement delivered at the first-ever Annual Bankers Day in The Gambia, at the Kairaba Beach Hotel.
The substantial growth of the banking sector, he noted, is as a result of the confluence of favourable financial policies, foreign direct investment inflows to the industry and intensified competition due to the number of banks in the country, which increased from only five in 2005 to twelve in 2015.
It is also on record that the growth had helped deepen the financial intermediation in the country, although not at the expense of safety and soundness.
“The industry is adequately capitalised and liquid,” the CBG Governor said. “The risk weighted capital adequacy ratio was 32.9 per cent in 2015, higher than the minimum requirement of 10 per cent.”
The average liquidity ratio was 93.4 per cent and prudential requirement of 30 per cent. Deposit liability is also said to have increased to D16.5 billion in 2015 from D4.7 billion in 2005, indicating public confidence in the new banks.
These are all sound indications, as foreseen by the GTB managing director, that there is some corn up on the mountain for a better and strong banking industry in The Gambia.
We would, however, like to remind players in the sector that “access to and use of formal financial services is still very low”; that “less than 20 per cent of the adult population” holds a bank account; that “the level of financial intermediation proxied by loan to deposit ratio at 29.7 per cent in 2015 is low and credit to the private sector at only 11 per cent of GDP in 2015 is insufficient to drive strong and sustained economic growth”.
Banking sector operators should also note that interest costs and administrative expenses and collateral requirements for loans are significantly higher in The Gambia compared to most sub-Saharan African countries.
Put together, we would like commercial banks to let the benefits in the profitable and prosperous trend of the sector be also enjoyed by the masses of the people, although there is some unfolding of good tide in corporate social responsibility by sector players.
“Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations”
Ralph Marston
