Luanda, July 19, (Lusa) - The president of the Angolan Banking Association (Abanc) said on Friday that ‘adjustments’ were required in the banking sector's regulations and acknowledged the difficulties in granting credit due to the demanding requirements.
Mário Nascimento, who was speaking to Lusa on the sidelines of the 14th BANCA FORUM, organised by Angolan weekly Expansão on ‘Sophistication and the Future of Banking in Angola: New Products and Services’, acknowledged that it was not easy to grant loans in Angola, which he justified with issues linked to financial literacy, lack of communication and regulation.
He emphasised that banks have responsibilities not only to their customers but also to the regulator and supervisor (Banco Nacional de Angola), with ‘many requirements’ that make the bank responsible in its relationship with the customer and in terms of compliance with risk legislation.
‘Today banking law is much more complex; it's not enough just to grant credit; you have to grant it under conditions that ensure it's solvent and that it returns to the bank so that its mission as a fiduciary is also fulfilled,’ he said.
Nascimento acknowledged that, for this reason, it is not easy to grant credit in Angola because customers are unable to fulfil many of the requirements, such as compliance with the tax situation, the risk of operations, etc.
‘It's not enough for an entrepreneur to go to a bank and ask for credit. Our regulations are so demanding that it's very difficult - almost impossible - for a start-up to get bank credit because [the bank] has no relationship with the client,’ Mário Nascimento told Lusa.
That's why, he said, the regulations ‘need some adjustments’.
‘We need to have regulations that allow promoters who don't have these conditions, who don't have these requirements, to have financing,’ he emphasised using other institutions, since financing isn't just banking.
‘We have other intuitions that are probably more suitable for certain client profiles,’ he suggested, pointing to the capital market, venture capital funds and private investors as the ones “that have the best conditions from a regulatory point of view to provide capital financing to companies”.
‘Our regulations are very much in line with the best practices of more developed markets,’ which are not always suited to the Angolan reality, he emphasised.
Concerning the Angolan banking sector, which has 23 banks, he pointed out that the bankarisation rate is around 30%, which means that banks have to look for customers and position themselves differently.
He emphasised that banks are concentrated in capital and very close in terms of their business model, which makes the market more limited. This is considering that the system needs to be restructured and that banks with more capital are needed to meet the challenge of diversifying the economy.
‘The challenges are great. We need restructuring, both from an institutional and market infrastructure point of view and even from a regulatory point of view,’ said the head of Abanc.
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