Cape Verde to take 5 percent stake in bank with social focus

7 January 2010

Praia, Cape Verde, 7 Jan – The Cape Verdean government has authorised the acquisition of a 5 percent stake in the capital of the country’s new bank, which will initially be 300 million escudos (about US$4 million), Cape Verde’s Inforpress news agency has reported.

The new bank results from an agreement from the island country’s government and the Banco Portugues de Gestao, an investment and merchant bank operating in the social economy area. Among other aspects, its mission will be to channel into the formal economy low-income population segments and micro and small companies not linked to banks, as a means to fight financial exclusion in Cape Verde.

In the first phase the Banco Portugues de Gestao should also have a 10 percent stake in the new bank.

The Cape Verdean Finance Ministry has been working on the project for more than two years. It has sought to encourage various public and private sector entities to take part in the bank’s financial structure, among them Correios de Cabo Verde, Imobiliaria, Fundiaria e Habitat (IFH), Instituto Nacional da Previdencia Social (INPS) and Caixa Economica de Cabo Verde (CECV).

CECV is the first private institution to express its willingness to acquire a stake of up to 20 percent in the new bank’s capital, as long as the level set for that financial institution is equal to the legally required minimum.

The proposal was approved by the General Assembly of the Caixa Economica savings bank in September 2009, with a view to reinforcing the capital of the planned new bank (still unnamed), which is governed by its statutes and by the specific laws for credit institutions and financial companies as well as by commercial law.

With this initiative the Cape Verde government aims to strengthen the country’s banking system so that it can better respond to activities such as micro-financing, credit for the launch of capital activities, risk capital, operating funds for social economy institutions or the promotion of social housing.