Financial Crime World

Human Resources Obstacle Hinders Financial Sector Reform in Guinea

Implementing recommendations for financial sector reform in Guinea is hindered by a significant challenge: the availability of human resources.

Challenges Faced by Authorities

The country desk and TA experts have emphasized that authorities are committed to implementing the recommendations proposed during TA missions. However, delays continue to occur due to a lack of available human resources.

World Bank’s Technical Assistance Efforts

The World Bank has been an important provider of technical assistance (TA) for Guinea’s financial sector. Recent efforts have focused on developing a credit registry and national financial inclusion strategy. Ongoing TA efforts aim to establish a credit registry, with less progress made in this area.

International Monetary Fund’s Financial Sector Stability Review

In its latest Financial Sector Stability Review (FSSR), the International Monetary Fund (IMF) highlighted the challenges facing Guinea’s financial sector. The report noted:

  • Cash-based and dominated by commercial banks: The country’s financial system is largely cash-based, with a small number of large commercial banks dominating the sector.
  • Limited financial inclusion: Only 8% of the population has access to an account in a bank or nonbank deposit-taking institution as of 2017.
  • Growing importance of mobile financial services: Mobile financial services have played an important role in increasing financial inclusion in recent years.

Sector Characteristics

The FSSR report also noted:

  • Lack of diversification and no stock market: Guinea’s financial sector lacks diversification, with no stock market to speak of.
  • Banking sector dominance: The banking sector is dominated by commercial banks, which hold 94.6% of total financial sector assets.
  • Decline in non-deposit-taking institutions: Despite efforts to increase financial inclusion, the share of insurance companies and non-deposit-taking institutions in the total assets of the financial sector declined in 2018.

Future Directions

The report emphasized the need for:

  • Greater cross-border cooperation: Given foreign ownership of many commercial banks in Guinea, greater cross-border cooperation is necessary.
  • Improved stability and resilience: The FSSR highlights the challenges facing Guinea’s financial sector and the need for continued efforts to increase financial inclusion and improve the sector’s stability and resilience.

In summary, the availability of human resources remains a significant obstacle hindering financial sector reform in Guinea. Efforts are needed to address this challenge and move forward with reforms aimed at increasing financial inclusion and improving the sector’s stability and resilience.