JOHANNESBURG, JULY 12, 2018 – Heavy exposure to a handful of borrowers has endangered the banking sector in regional financial hub Ivory Coast and reducing that risk will be a slow process despite reforms, a senior analyst with rating agency Moody’s said on Thursday.
Ivory Coast, one of Africa’s fastest growing economies, accounts for around 30 percent of total banking assets in the West African Economic and Monetary Union, whose members share a common CFA-franc currency pegged to the euro.
Low banking penetration – only 15 percent of the population possess an account – and a lack of credit information, however, have pushed Ivorian banks to focus on what they consider reliable borrowers. These are often large private conglomerates or entities in which the state holds a stake.
“Asset concentration is very high,” Olivier Panis, Moody’s senior credit officer for Europe, Middle East and Africa financial institutions, told Reuters.
