Optimistic outlook for Democratic Republic of Congo’s banking sector

by Developed Africa 24. September 2014 09:00

Despite less than 5% of the Democratic Republic of Congo’s adults estimated to have their own bank accounts (one of the lowest rates of banking penetration worldwide), projections released in September by the ratings agency, Moody’s, have suggested that the DRC’s banking sector can expect to grow over the next two years.

This will be fuelled by accelerating economic growth, an expanding mining sector (the DRC is the world’s sixth-largest producer of copper and the biggest of cobalt) and increased agricultural productivity, infrastructure reconstruction and domestic consumption.

The report predicts that the country’s GDP will grow at around 10% in 2014 and 2015, after growth increased from 7.2% in 2012 to 8.1% in 2013

The projected growth has been put down to the success of a peace accord reached in 2002, since when the DRC’s banking sector has grown steadily, with assets having being seen to increase dramatically from $300 million in 2002 to $4.2 billion in 2013.

Security risks have been considered as potential threats to this growth, with armed rebel groups still present in the mineral-rich east. Heavy fighting seen through the first ten months of 2013 has since been kept under control, however many areas formerly occupied by the rebel groups are yet to be secured and the infrastructure in these areas is yet to be repaired. A resurgence of conflict would impact on public finance sustainability and the business climate, however Moody’s report stated that:

While credit risks will remain elevated and profitability will be modest, we expect a benign operating environment over the next two years to support strong lending growth.”

This has led to Moody’s accrediting the DRC’s largest bank, Rawbank, with a B3 global local-currency deposit rating, declaring its outlook “stable” and making it the first bank in the DRC to receive a credit rating from Moody’s. All of this is likely to open doors to increased future foreign investment, and there are hopes that the strengthening economy will also contribute to human development.




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