Retail banks
Description: 

The retail bank 's main activity is to collect deposits and then lend that money to borrowers while providing other banking services. Retail banking acts as an intermediary between lenders with surplus financial resources and borrowers with financing needs.

Advantages: 

Economies of scale, including in the collection and analysis of financial data; opportunity to diversify the bank's credit activities ; potential grouping or splitting of the distribution systems ; more flexible borrowing conditions.

Drawbacks and precautions: 

Banks' ability to turn a short term and liquid resource into a long-term illiquid loan.

Prerequisites: 

Suitable Regulatory framework; available and sufficent resources to lend to local governments.

Success factors: 

Relationship of trust between banks and local governments ; Development of the bank experstise in local government finance (especially credit analysis) ; a combination risk/interest rate ensuring the sustainability of credit activities; banks's ability to attract local governments' deposits.

Operation: 

Ownership: Public (State) and Private. 

Operating: Recurring investment and project financing.

Sources: short-term, liquid investments and deposits; credit lines extended by national or institutional financial institutions (AFD, EIB, FINDETER, etc.).

L’économie politique de la décentralisation dans quatre pays d’Afrique subsaharienne: Burkina Faso, Sénégal, Ghana et Kenya

Submitted by Nathalie on Mon, 11/23/2015 - 19:24

Cette publication de 2011 s'inscrit dans une collection dirigée par l’Agence Française de Développement et la Banque mondiale qui s’intéresse aux grands enjeux sociaux et économiques du développement en Afrique subsaharienne.

French