The financing of the economy is the set of modalities by which economic agents obtain the financial resources necessary for the development of their activities. Banks and bank-like financial institutions play a major role in this financing.
In fact, banks act as intermediaries by transforming deposits into loans to finance the needs of individuals, households, businesses and public authorities.
The number of credit institutions operating in the WAMU space increased by 7.25% between 2017 and 2019, from 138 to 148 (WAMU Banking Commission). In Benin, over the same period, the number of institutions remained static, at 15 in 2019, after the merger of BOA Benin and the Banque de l'Habitat du Bénin.
In 2019, the 148 institutions in the zone granted CFAF 22,923,984 million, or 82.4% of all deposits collected, compared with an average transformation rate of 82.8% between 2017 and 2019. Long-term loans granted represent an average weighting of 4.45% over this period, while short-term loans averaged 53.6%. The net portfolio downgrading rate was 4.60% in 2019, a decrease of 80 basis points compared to 2017.
Source: AJEB construction from WAMU Banking Commission data
In Benin, the net portfolio degradation rate, which is well above the WAMU average, is 8.90% in 2019, compared with 6.80% in 2017. In 2019, the 15 credit institutions operating in Benin granted the economy CFAF 1,824,723 million in credit, an increase of 19.3% over the period under review, for a bank transformation rate of 72.7%.
Long-term loans, which will decline in 2019, account for 3.7% of the total granted by Benin's banks. At the same time, short-term and medium-term loans account for 34.2% and 53.1% respectively.
It should be noted that demand deposits account for an average of 53.5% of total deposits collected by WAMU credit institutions between 2017 and 2019. In Benin, this rate is 45%. It should also be noted that this review of the financing of the economy does not include the contribution of the Decentralized Financial Systems (SFD).
Source: AJEB construction from WAMU Banking Commission data
CJEA