http://www.gainako.com/

*" We therefore have three policy areas to consider, (1) limit the rate of
> entry into the banking sector, to
> maintain profit incentives and encourage expansion across the country by
> first mover protection for a
> certain period. This will include for example if access bank becomes the
> first bank to open a branch in
> a certain area of the country, no other bank should be allowed to open in
> the same area for a certain
> period say, three years, to serve as an investment incentive. This will not
> only increase access to
> banking services to the wider population but will also increase the level
> of intermediation through the
> banking system and thus the potential for capital accumulation and funding
> expansion. (2) Internally
> liberalise the financial sector to allow banks to go into insurance or
> pension funds management and
> vice versa if they so wish to diversify their exposure and gradually phase
> out the participation of Social
> Security and Housing Finance corporation in housing finance and pension
> management. We cannot
> aspire to a vibrant market system and have the stifling legislation or the
> state competing in a sector that
> should underwrite our drive towards a market economic system. The pension
> funds management is
> closed to the private sector but how much average pension is paid by the
> government. Efficient and
> well regulated private companies operating in the pension funds management
> sector are more likely to
> generate and pay significantly more pension rate that what the government
> pays at present.(3) We
> have to make sure we deal with the problem of information asymmetries as it
> not only adds to cost of
> borrowing but also limits credit availability. The government should
> encourage the setting up of private
> financial and investment research companies that will make information
> readily not only to domestic
> financial institutions but also foreign companies looking to invest in the
> country. At the moment it is
> almost impossible to get information about companies in the country let
> alone their financial
> fundamentals. The government should also encourage a private credit
> reference agency in the country
> as it will provide significant information about potential borrowers thus
> not reducing the cost of
> borrowing but also the risk of loss on the part of banks.
>
> Unless policy changes are introduced to address these problems, the
> relenting rate of entry into the
> banking sector will do more medium to long-term harm than good. The
> encouraging aspect is, we are
> a developing country undergoing reforms and I believe the best days of this
> country are ahead of us.
>
> God Bless The Gambia."*




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--
yj

There is no god but Allah and Muhammad is His messenger.

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