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Country Commercial Guides for FY 2000:
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CHAPTER VIII: TRADE AND PROJECT FINANCING
BRIEF DESCRIPTION OF BANKING SYSTEM
The banking system in Madagascar consists of six commercial banks. European banking institutions hold a controlling interest in two banks: Banque Malgache de l'Océan Indien (BMOI) and BNI-Crédit Lyonnais (BNI-CL). Union Commercial Bank (UCB) and State Bank of Mauritius (SBM) are branches of Mauritian parent companies of the same name. The former state bank BFV was purchased by the French bank Societe Generale, and BTM bank is in the process of privatization. For private banks, financial statements are in compliance with international standards and audits are performed both by local and internationally recognized accounting firms. There are no available data on loans granted to the government, state-owned enterprises, private sector or individuals.
FOREIGN EXCHANGE CONTROLS AFFECTING TRADING
Since May 1994, there is an interbank foreign exchange market, which fixes daily the rate of the FMG (Malagasy Franc), according to the floating monetary system.
Free access to foreign exchange for current commercial operations was adopted in 1996. To encourage this development, the Central Bank has amended the regulations in force, in particular by significantly lowering the minimum capital required, to spur exchange bureaus.
The Government has lifted all restrictions on current payment and transfers and has accepted the obligations of Article VIII of the IMF Articles of Agreement which plans to abolish exchange controls.
GENERAL AVAILABILITY OF FINANCING
The financial sector is not sufficiently developed to provide the services small borrowers need. Numerous initiatives of creditors and donors aim at the granting of micro-credit. The government will support the establishment of credit unions and other suitable credit facilities and will encourage creditors and donors to harmonize their efforts in this field. The availability of local financing has been constrained by the Central Bank, in order to control inflation in the wake of large public sector fiscal deficits that have absorbed much of the available pool of local savings.
FINANCING OF EXPORTS FROM MADAGASCAR
Only well-known and significant exporters can get export credit in Madagascar. The credit granted is mainly for the purchase of traditional agricultural products such as vanilla, coffee, cocoa and cloves. In case of pre-financing by foreign importers, local exporters still have to pay high interest rates to their banks.
On March 31, 1998, an agreement was signed between OPIC and the Malagasy government in order to facilitate U.S. investment in the country. EXIMBANK is now assessing a new program with the country. The World Bank and the African Development Bank have financed a variety of infrastructure and other types of projects. Generally speaking, the financing possibilities that are available to local firms are quite limited both in terms of variety and capacity.
LIST OF BANKS WITH CORRESPONDENT U.S. BANKING ARRANGEMENTS
BTM: Bankers Trust/New York Citibank/New York Bank of New York French American Bank/New York Société Générale/New York BMOI: French American Bank/New York Dresdner Bank/New York UCB: Citibank/New York SBM: Citibank/New York Bankers Trust/New York BNI: Bankers Trust/New York Bank of New York Citibank/New York American Express International Bank/New York Chase Manhattan Bank/New York BFV/SG: Bank of New York American Express International Bank/New York Bank of America/San Francisco Bankers Trust/New York Chemical Bank/New York French American Bank/New York
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[end of document] Note* International Copyright, United States Government, 1999 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
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