Cape Verdean central bank wants more lending to the economy

9 February 2015

The Bank of Cabo Verde (Cape Verde) wants commercial banks operating in the archipelago this year to supply more credit to the economy, thus contributing to the growth of gross domestic product (GDP), the governor of the central bank said Friday.

At a meeting with representatives of commercial banks, Governor João Serra said he was not satisfied with the level of credit to the economy and said he was concerned about “practically residual” growth in credit in recent years, which in the past year was actually negative.

This lack of credit occurs alongside excess liquidity at all commercial banks, and the governor noted the high level of bad debts, “with ratios that require some caution,” (18 percent).

Cited by weekly newspaper A Semana, Serra said, however, he was optimistic and that he expected greater balance between more credit to the economy and the stabilisation or even reduction, of bad debts.

The chairman of Cabo Verde’s Caixa Económica bank, Emanuel Miranda, noted some of the challenges facing commercial banking, namely the reduction of the State’s role in the economy along with more “support” by banks to the private sector.

According to Miranda, the great challenge to granting credit related to the manufacturing sector, given the weaknesses of the Cape Verdean business community and suggested that the banking sector “could perhaps create special units to list opportunities and then help prepare the projects.” (macauhub/CV)