On creating an enabling business environment
In what ways can the banking sector in Côte d’Ivoire support the government’s efforts to achieve the growth targets set by the National Development Plan 2021-25?
ISSA FADIGA: The primary and secondary sectors will largely drive the Ivorian economy in the coming years. Some of the government’s development objectives include adding value to these sectors, addressing broader human resources issues and improving corporate governance. The human capital and governance aspects are important to include in this broader strategy, as ensuring coordination between private and public sector efforts is crucial to long-term growth.
In the case of the agriculture sector, many small-scale farmers encounter difficulties obtaining funding, a problem that larger producers do not tend to have. As such, lenders are embracing an approach that facilitates financing along the entire value chain, addressing the needs of operators of all sizes. Other sectors such as transport, telecommunications, infrastructure, energy and distribution are also at the centre of the current development policy.
The government has continued to streamline the business environment and adopt reforms in recent years. It has established commercial courts, a one-stop shop for businesses and a new mining code. These factors have enabled the country to receive high scores from international ratings agencies, making it easier to raise funds on global financial markets.
To what extent can Côte d’Ivoire simplify access to finance for young entrepreneurs and small and medium-sized enterprises (SMEs), both of which represent a large part of the Ivorian economy?
FADIGA: While entrepreneurs are often experts in their fields, they also tend to centralise the decision-making process. This can pose a governance deficit and put a company at risk. SMEs primarily face challenges when it comes to complying with financial reporting requirements, operating with a less-than-resilient governance system and navigating a lack of overall financing guarantees. Through capacity-building workshops and greater engagement, issues such as these can be mitigated.
Several actions have been taken in this regard. For example, the Central Bank of West African States set up a credit bureau where all banks are required to report on the practices of entrepreneurs, allowing us to address the issue of information transparency.
Additional efforts are under way to help SMEs and entrepreneurs formalise their business processes, as many such firms have difficulty updating their financial records in accordance with reporting standards. In such cases, banks usually consider several variables related to the size of the market, the experience of the manager, the governance model, the organisational structure, the equipment and human resources to find the most appropriate approach. Using these considerations, we were able to triple our volume of SME loans between 2020 and 2022.
How is the digital banking segment developing in Côte d’Ivoire?
FADIGA: It was previously assumed that digital banks would compete with telecoms operators because e-money is well developed in locations with high mobile phone penetration. However, today they are seen as mutually beneficial and a catalyst for growth.
That being said, it is essential for banks to work independently to develop digital platforms, continue to focus on service delivery, and, in parallel, develop interfaces with mobile operators that allow users to access their accounts, as well as transfer or receive funds. These complementary efforts will help us better address the issue of need and ensure financial inclusion in a sustainable and more holistic way.