Senegal: Government urges local banks to further support agriculture sector and SME
(Ecofin Agency) - Senegalese local banks were asked to provide more funding to SMEs and agricultural marketing campaigns. This was during a meeting held on Jan 9. “Banking institutions are a key component of financial sector. They have a crucial role in financing the economy”, Amadou Bâ (photo), Senegal’s minister in charge of economy, finance and planning, said on the occasion.
Indeed, Senegalese SMEs, which constitute the large part of companies, have difficulty to obtain credit from banks. In addition, local farmers are short of funding to put products on market.
Banks should also reduce interest rates, applied on these funding, which stay around an average of 9.3% compared to an average of 6.2% in the country.
Considering that the WAEMU community is implementing new prudential standards, known as Basel II and Basel III, banks might be reluctant to follow the government’s recommendations. In fact, these standards may actually push the lenders to be tighter when providing loans.