It was in 1992 when FMO met a French International Banker Mr. Paul Derreumaux in Mali for the first time, who initiated more then 30 years ago the establishment of the Bank of Africa Bank Mali. Together with Malian elite and also African elite from other West African countries Mr. Derreumaux established this bank, knowing that only through very efficient and well-managed commercial banks and other financial institutions, Africa could grow and develop economically by financing the private sector. Mali was the first country, where the Bank of Africa Group was established. The second was Benin, where in 1989 Mr. Derreumaux got a banking licence in an economically grounded economy after the collapse of the communist system. After more then 15 years of operations the Bank of Africa Benin is in a very good shape.
 
Despite the relatively small size and value of the Benin financial market, the assessors noted the success of Bank of Africa and introduced new products, such as credit cards and online banking. Bank of Africa Benin is now the leading bank in the market, with 40% of deposits and 35% of loans. After Benin the Group Bank of Africa created new banks in 9 other African countries from the French West Africa to the English East Africa countries including special financial institutions like Housing Finance, Micro Bank, Leasing Finance and Insurance. The latest banks were established in Madagascar and Mauritius. The Bank of Africa Madagascar is also a successful story after the take over of a bankrupt state-owned bank BTM in 1999. Now this bank is one of the four largest banks in Madagascar with 55 branches in all corners of the country with more than 350.000 loans to local small entrepreneurs and businesses. Actually, the Bank of Africa Madagascar is very profitable and sustainable and recently this bank also created a Micro Bank Institution in Madagascar together with a specialist Micro Banking Group Planet Finance.
 
During all this years FMO has supported this group substantially by taking participations in the Holding Group (20%), in the Bank of Africa Senegal, in the Bank of Africa Madagascar, in the Bank of Africa Kenya, in the Bank of Africa Uganda and in the Bank of Africa Tanzania. They also supported this group by Technical Assistance and Capacity Development and local currency credit lines for financing SME"s. The development of the Bank of Africa Group has been intensively followed-up by taking Board Seats in the Holding Group and the various banks and also by assisting in putting in place International Best Practices and Corporate Governance.
The financial sector in Africa is growing very fast and now the Group Bank of Africa will start in a new alliance with the Group BMCE. Morocco has made great strides in improving its business environment, particularly in the areas of macroeconomic stability and infrastructure development. The Group BMCE in Morocco has been established in 1959 and is now the second largest bank with a total balance of EUR 6900 million, 322 branches and 3200 employees. The bank is quoted at the Casablanca Stock Exchange with capitalisation of 6% of the total financial market of Morocco. Beside banking the Group BMCE is also active in assurance, telecommunication, media, tourism and industrial activities. The Group BMCE has great ambitions in Africa with this new venture with the Group Bank of Africa and is looking to become market leader in the financial sector of Africa with focus on establishments in more countries, on mortgage lending and micro banking. Important issues are improvements in Banking Information Technology in order to reach the "mass" in Africa for new financial products.
While Dutch International Banks have not shown keen interest in Africa and some have even withdrawn in the recent years from the African continent because new expansions and consolidations are coming up in the African financial sector, Moroccan banks and other big companies have seen new opportunities in penetrating in the Africa market and are now following China, India, Brazil in investing in good financially viable business proposals. The investment of 35% in the Bank of Africa Group by the Group BMCE is convincing us that South-South cooperation will at least prevail and will be at least more sustainable for the economical growth in Africa. A dream of Mr. Paul Derreumaux came true and the foundation for further expansion and development of the financial sector in Africa are laid down. Now a new generation of well-educated Africans will continue and it is expected that more and more South-South relations will be established in order to further mature further African businesses and independence.
 
Ben Zwinkels is a Senior Investment Officer of the Equity Department at the Netherlands Development Finance Company (FMO).
 
www.fmo.nl

More columns by Ben Zwinkels

 
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