Gambia: Gambia Financial Sector Profile 2011

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.

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.