Introduction:
 The
Gambia Financial System has evolved rapidly over the
last several years, and is markedly liberalised now.
Most interest rates are freely determined, direct controls
have been eliminated, exchange controls abolished and
the country has moved to indirect system of monetary
controls using open market operations. These measures
increased competition in the domestic financial system.
Legislation:
As a result of developments and policy practices changes
in the legislation have also taken place. The Financial
Institutions Act (FIA), Central Bank Act (CBG Act) have
been revised. The FIA Act 2003 has been enacted while
the CBG Act 1992 is almost in its final stage of revision.
The Insurance Act 2003 and the Money Laundering Act
2003 have also been enacted.
Financial Controls:
The Central Bank of The Gambia is mandated under the
provisions of the Financial Institutions Act (FIA) 2003
and the Central Bank Act (CBA) 2006 to license and regulate
all financial institutions in The Gambia. The Bank has
an open policy towards Greenfield investment in the
financial sector that would promote and enhance the
country’s sound financial system.
Commercial Banks:
The Gambia’s financial sector has been growing in numbers.
It consists of commercial banks, insurance companies,
foreign exchange bureaus, microfinance institutions
and other non-bank finance companies. However, commercial
banks dominate this industry controlling over 90%. Currently,
there are at least seven banks with an average foreign
equity of over 60%. Six of the banks are involved in
conventional banking and one in Islamic banking. In
terms of scope of activities the banks operate mainly
within the Greater Banjul area with some branches and
agencies located in other parts of the country. The
remaining parts of the country are mainly catered for
by the micro-finance institutions.
Insurance Sector:
There are eleven insurance companies in The Gambia and
most of them are involve in non-life underwriting. There
is only one company that is entirely a life underwriter
and another that is a composite insurer.
Micro-Finance Sector:
The micro-finance sector consists of 66 institutions
but classified under several categories: Fiduciary Financial
Institutions, Rural Finance Bureaus, Community Finance
Bureaus, Micro Savings and Credit Bureaus and the Savings
and Credit Associations. The micro-finance sector has
been identified by the Gambia Government as one of the
many instruments crucial in its drive to reduce poverty.
Investment Opportunities:
The financial sector in The Gambia, though competitive,
has room for new institutions and more so new products.
With the global trend moving towards universal banking
and offshore banking, investments in these areas can
enhance The Gambia’s competitiveness internationally.
Although all the necessary legislations are not yet
to be in place to allow for offshore banking activities,
efforts are underway to address this.
In addition to the FIA Act and the CBA Act, potential
investors should acquaint themselves with other statutes
such as the Insurance Act and the Anti-Money laundering
Act. |
