Financial Regulatory Bodies in Gabon Create New Institutions to Boost Local Payment Systems and Lending Confidence

Gabon’s regional authorities are working on creating two new institutions aimed at providing banks and merchants with more information about their customers, thereby improving local payment systems and lending confidence.

Improving Local Payment Systems and Lending Confidence

The new institutions will help identify clients who have committed payment-related infractions, such as submitting bouncing cheques, and subsequently ban them from using these payment systems. This move is expected to increase confidence in means of payment.

The Payment Incidents Registry (CIP)

The first institution being piloted in Cameroon and Chad is the Payment Incidents Registry. This registry aims to identify customers who have committed payment-related infractions and ban them from using these payment systems, thereby increasing confidence in means of payment. The registry will consist of two elements:

• CIP Collect: a central database that hosts information on payment incidents broken down by country
• Allo-Incidents: distributes this information to banks and other lenders, as well as to merchants and recipients of payments

Gabonese banks began collecting biometric identifying information from new customers in 2015 to lay the foundations for the system. The institution is expected to become operational soon, according to Pierre-Marie Ntoko, secretary-general of the Professional Association of Credit Establishments.

CEMAC-Wide Credit Bureau

The second institution is a CEMAC-wide credit bureau, which is due to become operational by mid-2017. This new system will replace an existing risk registry run by the BEAC and will have a greater impact on the sector than the payment incidents registry, according to industry stakeholders.

• The credit bureau will allow banks to analyze clients’ credit history and other information
• It will cover their history not just with banks but also with other institutions such as microcredit providers and large retailers

Impact of the New Institutions

The combined effect of these two projects is expected to be profound, significantly improving lenders’ access to information. “These institutions will have a major impact on the market by improving lenders’ access to information,” said Faissal Chahrour, CEO of Alios Finance Gabon.

• The new credit bureau is expected to boost lending and reduce costs
• It will allow banks to better analyze small and medium-sized enterprises, potentially leading to increased credit to these firms

Industry Stakeholders’ Views

Industry stakeholders believe that the new system will have a positive impact on the development of local payment systems. “The current registry has a lot of limitations, such as a lack of sufficient information on clients,” said Ntoko.

“The credit bureau will allow them to look at clients’ credit history and other information.”

Claude Ayo-Iguendha, director-general at BICIG, added that the challenge lies in harnessing historical information needed for the project.

Conclusion

Overall, these new institutions are expected to have a major impact on Gabon’s financial sector by improving lenders’ access to information, boosting lending, and reducing costs.