Interview: Henri-Claude Oyima
In light of the abundant liquidity in Gabon’s banking system, to what extent do you feel that financial intermediation can be further encouraged?
HENRI-CLAUDE OYIMA: From a national point of view, virtually everybody that is involved in the finance sector has made it clear that there is currently a broader need for an increase in financial intermediation.
To begin with, this requirement is felt particularly strongly by households, where the basic level of penetration of banking services needs to be improved. Corporate entities also need it, given their requirements for financing, notably in terms of investments. Finally, public authorities have a demonstrable need for easier access to credit in order to help underwrite their large infrastructure projects.
From the banking sector’s point of view, faced with this widespread need for increased financial intermediation, the stakes involved consist not only of formulating an appropriate response in terms of products that are aligned with the acquisition of liquid resources from clients, but also in terms of deciding how to allocate loans and credit.
Banks are therefore playing their role of intermediation by transforming the collection of short-term and liquid resources such as those from households and other retail depositors into stable employment for private enterprises and public authorities.
What kinds of projects can help small and medium-sized enterprises gain access to private financing? What are the challenges that have to be overcome for this to happen?
OYIMA: Whether they are small, medium or large, all companies have a need for financing, and part of the role of the banking sector is to respond to this diversified demand across the economy.
However, banks – not only in Gabon but everywhere – carry out their activity in a very constrained regulatory environment, to which they must adhere in the strictest terms. As a consequence, the banking sector has to take into consideration a wide variety of prudential factors, especially capital adequacy ratios and those concerning risk diversification.
In order to be able to adhere to this sort of broad-based regulation, banks have to demand that their commercial clients are able to maintain a certain level of discipline. Nowhere is this more clear than in terms of their ability to provide financial statements that are both dependable and solid.
What do you see as the primary causal factors behind non-performing loans? How prevalent are these issues in CEMAC?
OYIMA: In the CEMAC region, the risk of default is estimated to be slightly over 10%, although our banking group has set the ceiling at 2%. This is intended to serve as a maximum level of non-performing loans incurred by our network, which in turn is not to be surpassed. This is further enabled by the specific organisation of our credit allocation process, which we treat as a priority to be overseen by our risk management department, which supervises and helps to mitigate all the risks our banking group faces.
How much of a concern is the current level of net capital outflows from Gabon?
OYIMA: At our level, we have not noticed a marked increased in the level of capital outflows. In Gabon, the dynamic of capital flows tends to be structural, and this is for at least two reasons. The first is linked to the liberal exchange regime of our currency. In effect, the Central African franc is a transferable currency, but is one that is pegged to the euro.
The second explanation for the nature of capital flows in and out of Gabon is related to the structure of our commercial balance, given the varying volumes of imports and exports in certain economic segments.
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