banking news international
African banking
“too concentrated”
The financial services
sector in many
African countries
was extremely
concentrated and the
high costs inhibited
the flow of credit,
Finance Minister
Pravin Gordhan said at the inaugural
summit in Africa of the Institute
of International Finance, a global
association of financial institutions
including banks, insurance companies
and asset managers.
Gordhan told delegates that there is a need for
greater competition to be introduced into the sector.
‘A determined effort will have to be made to increase competition in the financial sector. High levels of concentration lead to
excess liquidity and risk aversion. The World Bank estimates that
the average market share of the three largest banks in Africa is
about 73%.
‘These oligopolistic banking sectors have a number of negative
consequences, including high interest rate spr