Financial Crime World

Chad’s Financial Sector Faces Challenges in Compliance with Regulations

Despite being a largely cash-based economy, Chad is working towards strengthening its financial sector by ensuring compliance with financial regulations. The country has made significant strides in developing its banking system and providing various financial instruments.

Banking System

While the banking system in Chad is limited in size and available services, financial instruments such as:

  • Letters of credit
  • Short-term loans
  • Foreign exchange operations
  • Long-term savings instruments

are available to the private sector. The Commission de Banque de l’Afrique Centrale (COBAC), a regional banking agency, regulates the banking sector.

Currency and Exchange Rates

Chad is a member of the CFA zone and the Central African Monetary Union (CEMAC), which guarantees the convertibility of the Central African CFA Franc into Euro at a fixed rate. The country’s exchange rates with the US dollar vary according to the strength of the dollar versus the Euro.

Foreign Exchange Controls

There are no restrictions on transferring funds into Chad, but several restrictions apply to money departing the country:

  • Individuals transferring more than $1,000 out of Chad must provide documentation of the source and purpose of the transfer to the bank.
  • Transactions of $10,000 or more for individuals and $50,000 or more for companies are automatically notified to the COBAC.

New Legislation

A new legislation aimed at restricting foreign exchange holdings and cash outflows was delayed in 2020. The law is intended to curb government appropriation of large sums of foreign currency through legal procedures.

International Banking

There are no US banks currently operating in Chad, but several local banks have correspondent banks in the US and Europe and can facilitate international transfers:

  • Société Générale des Banques
  • Banque Commerciale du Chari
  • Ecobank Tchad
  • Orabank
  • Commercial Bank Tchad
  • Banque Agricole et Commerciale
  • Banque Sahelo Saharienne pour L’investissement et le Commerce (Tchad) S.A.
  • United Bank for Africa (UBA) Tchad

New Banks

The country’s financial sector has also seen the establishment of new banks, such as:

  • Banque de l’Habitat du Tchad, which started operations in 2017 and provides traditional banking services with a focus on home loans. The bank is backed by the Government of Chad, the national oil company, and the national social security agency.

Conclusion

While Chad’s financial sector faces challenges in compliance with regulations, the country is making efforts to strengthen its banking system and provide various financial instruments to support economic growth.