Perks M Ligoya: "Financing Africa - through crisis and beyond"
Opening remarks by Dr Perks M Ligoya, Governor of the Reserve Bank of Malawi, at the
launch of the book "Financing Africa - through crisis and beyond", Lilongwe,
7 November 2011.
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Ms Sandra Bloemenkamp, Country Manager for Malawi, World Bank
Mr. Douglas Arbuckle, Mission Director, USAID Malawi
Richard Dictus, Resident Coordinator, UNDP
Distinguished Resource Persons
Workshop Participants
Ladies and Gentlemen
Opening Remarks
I am honoured to join you this evening at the launch of a flagship publication, Financing
Africa: Through the Crisis and Beyond.
This publication is a milestone study on the financial sector in Africa. It takes a fresh look at
Africa's financial systems in the light of major changes that have taken place in the global
financial structure in the wake of the 2008 global financial crisis. The study covers Africa's
challenges in developing and safeguarding the current financial system.
Ladies and Gentlemen, the main barriers to financial sector development in Africa include
access to finance and high cost of loans. To grow and improve its productivity, the African
financial system needs more competition and be more innovative. The increased competition
would promote financial innovations and adoption of new technologies; this would ensure
better services to customers and an expansion of these services to new clients.
Ladies and Gentlemen, financial innovations comprise a variety of new products. Recent
examples in Africa include mobile banking (access to basic payment services through mobile
phones), and new players in the financial systems such as deposit taking microfinance
institutions, and agency banking (where banks are allowed to engage third parties to provide
certain banking services on their behalf without having to put up brick and mortar).
Ladies and Gentlemen, this expansion must be done while paying attention to the users of
financial services. Adequate financial literacy should be infused to both businesses and
households through development of financial skills and establishment of frameworks for
consumer protection.
The book contains a series of indicators on access, size, and efficiency of financial services
in Africa. Today, African banking systems are stable, well-capitalized, and have good liquidity
levels. However, they lack depth, because they are too dominated by banks. The
transactions are mostly short-term, which is hardly conducive to business development.
Financial systems also lack momentum, and penetration of the bank branches per capita is
well below world averages. Furthermore, banking services are expensive and limit
households' access to basic financial services. It is therefore encouraging to note initiatives
by some banks to reach out to the "unbanked" populations.
Finally, may I assure you that the Reserve Bank of Malawi will always strive to provide an
enabling legal and regulatory framework to encourage innovations by all players in our
financial sector in order to enhance access to financial services. In this regard, we will
continue to work with stakeholders to put in place an enabling environment for business to
thrive.
I thank you for your kind attention, and God Bless you all.