Banking - Bankers and insurers have stressed the need to have a regional platform that supports the expansion of indigenous banks and facilitates cross-border advocacy for more competitiveness in the financial industry.
The motion was passed at the first Common Market for Eastern and Southern Africa Business Council financial sector dialogue held in Nairobi, Kenya, recently.
The objective of the meeting was to review and provide further input for a private sector assessment paper prepared by the CBC on regulatory frameworks and its impact on the banking and insurance sectors in the region.
In his opening remarks, the Comesa Business Council board director Mr Trust Chikohora informed the regional meeting that the dialogue was held in response to a consultative meeting held in March 2011 by 10 bankers' associations who tabled to the business council, the need to re-establish a regional platform and agenda that addresses the constraints faced by the banking sector.
"Following exhaustive ground research and mapping of the bankers' associations in the region since the previous gathering as a common platform in 2002, under the Comesa Bankers' Association, 10 national bankers' associations were brought together to engage in an initial formal regional dialogue for the first time in 11 years," Mr Chikohora said.
During the deliberations of the meeting, various industrial players from the banking sector agreed that the key constraints faced in banking sector were the issues of low access to banking facilities, borrowing costs incurred by the consumers of the services, transparency and the necessary disclosures to facilitate consumer information, the lack of lending funds for ascertained project sizes, length of time for credit bureau time assessment and high interest rates.
The banking industry applauded the Comesa Regional Payment and Settlement System and tasked the CBC to increase awareness of this tool amongst the bankers so that the importers and traders within the Comesa countries can have more competitive and affordable cross border transactions.
The system, whose main participants are central banks, allows member states to transfer funds within Comesa on the same day and at a lower cost. It benefits exporters and importers in the region by allowing for a faster, safe and secure transfer of funds and eliminates the need for confirmed letters of credit and associated costs.
Chief executive of the Kenya Bankers' Association Mr Habil Olaka noted that as the financial sector in Comesa has expanded greatly over the last 20 years, with entrants from microfinance, insurance and payment systems companies, need to have a platform that facilitates cross-border advocacy for more competitiveness in the financial industry was very crucial.