FIB bank branches out to Kanilai

Hundreds of people, last Saturday, converged at President Jammeh’s native village of Kanilai in the Foni Kansala Distict of the Western Region, for the formal opening of the sixth branch of the First International Bank (FIB), by President Alhaji Dr Yahya Jammeh.

The bank is the first in Kanilai and the whole of Foni and is expected to bring banking services to the doorsteps of the local people in the area in line with the goverment’s development policies. The branch’s opening is also timely, given the rapidly changing landscape in Kanalai and its satellite villages.

In his inaugural speech, President Jammeh said: “Our progress towards significantly reducing poverty and achieving the [MDGs] hinges on our consistently achieving high economic growth which is shared broadly across all sectors of our society”. Dr Jammeh said an important contributor to this is a dynamic and flexible financial system that contributes to economic development.

“Even though banking began in The Gambia over a 100 years ago, the financial sector has registered an unprecedented change in the past five years. However, even though there has been significant growth in banking system assets and customer deposits, a large percentage of our population are still excluded from access to basic financial services,” he said.

This, according to President Jammeh, impacts negatively on the government’s attempts to reduce poverty as “our long term objective is to eventually have a financial institution in every town and large village in this country so that we can build a strong, vigorous and growing economy that will ultimately reduce poverty and provide equal opportunities for all Gambians regardless of their geographical location”.

For that to happen President Jammeh said “we must expand real economic activity in the rural areas. This will provide incentives for financial institutions to mobilize savings and seek financing opportunities in the rural areas”. President Jammeh then repeated his call for Gambians to go back to the land to utilise their God-given natural resources of land and water to improve the country’s economic circumstances.

Dr Jammeh said the banking sector has to complement government’s initiatives by giving out loans at reasonable interest rates to allow the farming communities to access these loans and be able to use the loans to expand and improve upon their production. “I therefore hope that the FIB branch investment in Kanilai is not a one-off event but the continuation of a process of fulfilling our ambitions of making The Gambia a financial centre and gateway into a new emerging Africa,” he went on.

Speaking earlier, Mousa Gibril Bala-Gaye, the secretary of state for Finance and Economic Affairs, said The Gambia had registered reasonable economic growth, creating the basis for rapid expansion of the banking and other financial institutions. He added that this year, the Gambian economy is projected at 6.5 per cent premised on continued growth in tourism, telecommunication and construction.

The banking industry, he went on, remains strong and increasingly competitive. “The industry average risk weighed capital adequacy action was 23.8 percent at end March 2008, higher than the minimum requirement of 8 percent. It is heartening to note that all the banks observed the prudential requirement,” he said

SoS Gaye said over the years, significant financial sector reforms geared towards financial liberalisation and institutional development have been implemented to further enhance the contribution of banks and financial institutions to the economic development of The Gambia. Indeed, the opportunities in the Gambian economy are immense. He, however, observed  that there are challenges that hinder the full realisation of banks’ contribution to economic development, wealth creation and poverty reduction.

“For instance,  our banking institutions are located predominantly in the Greater Banjul Area, whereas vast areas of the country remain un-banked or under-banked. Thus, despite the significant growth in industry wide deposits, we cannot claim to have exhausted the full potential for deposit mobilisation in the country. Banks are therefore encouraged to branch out into other parts of the country,” he stated.

To SoS Gaye, to ensure that there is ethical banking in The Gambia, the sector is expected to maintain a high sense of professionalism as well as establish a good relationship between the regulators and the Bankers Association.

“Banks in this country have traditionally relied on the pouching of qualified personnel from sister institutions. This is retrogressive and I will urge all banks to assist in capacity building efforts so that the industry can boost of highly trained staff in all aspects of banking,” he stressed

SoS Gaye added: “The expansion in the banking sector should also mirror the range of products that they offer. I know that the banking sector has not been very supportive in terms of increasing productivity of the real sector such as agriculture and will very much like to see rural bank branches like the Kanilai First International Bank help in this area, as agriculture is the predominant preoccupation of the population in rural Gambia.”
He then urged other banks to emulate this important step by the First International Bank, in order to bring banking services to the doorstep of Gambians.  

Momodou Bamba-Saho, governor of The Central Bank of The Gambia, said his institution contributes to the government’s aim of meeting the economic development aspirations of the people of The Gambia by working to achieve and maintain low inflation and to promote a sound and flexible financial system that meets the needs of the economy.

He disclosed that at end 1994, the value of Gambian banknotes and coin in circulation was just D226 million. Fourteen years later, total banknotes and coin in circulation amounted to D1,890 million  despite an environment of relatively low inflation for much of the past 14 years.

Total bank customer deposits, he went on, have increased by more than 1000 percent from D594 million to D6,585 million during the same period while deposits of micro-finance institutions have grown from very low levels in 1994 to D255 million at end-2007. There has been similar strong growth in banking system assets and loans.

Governor Saho further revealed that annual transition volumes in the foreign exchange markets have grown from $440 million in 1998 to $1,700 million in 2007 and the number of banks has increased from 4 in 1994 to 10 and the number of branches has tripled to 47 with many more in the pipeline.

“The number of accounts at banks and other financial institutions has increased from less than 70,000 in 1994 to more than 330,000 today,” the Central Bank boss said.

However, he said, significant work still needs to be done to improve access especially in rural areas and to create a favorable environment for the operation of non-bank financial institutions. To that effect, the Central Bank has initiated the process of formulating new non-bank financial institutions legislation which will improve the legal framework for non-bank financial institutions.

In his statement, Alhaji Abdoulie M Touray, on behalf of the chairman of FIB, said Foni Kansala District, which includes Kanilai, is one of five Foni Districts in the Western Region covering an area of 691 sq km with  a total of 161 villages and gross population of 49246 according to the 2003 census.

“The five Districts are accessible by road and the distance from Foni Brefet to Jarrol is about 80 kilometres. It is evident that there is potential market for bank clients in the five districts,” he said

According to Mr Touray, such a bank will have a competitive advantage due to the fact that there is no bank in the whole of the five districts.