Djibouti: A new paradise for banks

(HornTrade) – The number of banks is growing. But BCI-MR still retains 60% market share. After opening in Djibouti in October, a subsidiary of the Warka Bank for Investment and Finance of Iraq, a private bank based in Tanzania is the Exim Bank (Djibouti), while the Central Bank of Djibouti negotiates the arrival of a Russian institution. The banking market seems quite limited and busy to handle such an influx of banks. Thus, the Exim Bank (Djibouti) can not be expected to take large market share. Because even if Tanzania and Djibouti are part of the Common Market for Eastern & Southern Africa (Comesa), the two countries have very little trade between them.

In addition, the installation of these new facilities is not always easy. The Shoura Bank, recently opened in Djibouti, just to start: it is looking for local shareholders and has been a misuse of funds even before its opening. For its part, the Bank of Africa (BOA), which bought Banque Indosuez Red Sea (BIMR), recorded an early leak of clients, including French, to one of two banks owned European Bank for Trade and Industry – Red Sea (BCI-MR, a subsidiary of BRED) and Bank of deposit and credit of Djibouti (CDD). BCI-MR, which claims to hold 60% market share, works much like the State Bank of Djibouti, recovering the management of external funding for government and bank accounts of state corporations.

The new banking law under consideration, bringing the banks’ minimum capital 300 million FDJ (1.2 million €) FDJ 1 billion (€ 3.9 million), may lead to departure, the redemption or bankruptcy of some of these banks.

Source:  LOI

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