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Is the Congolese banking industry hostile or favorable to new entries?

André M. Nyembwe, Honoré Mbantshi et Emmanuel Sungani

ABSTRACT

Since 2010, the banking industry in the Democratic Republic of Congo has lost a quarter of its banks, from 20 to 15, raising questions about its condition. In attempting to answer the question of whether this industry is conducive or hostile to new entry, the paper analyzes a series of indicators or factors and finds that several of them are likely to discourage new entry while the fewer ones that may be favorable signals would require either reforms or investments to activate them. The analysis indicates that the current configuration of the Congolese banking sector, as revealed by these various indicators and factors, would be more favorable to the establishment of foreign banks, particularly African banks, through asset purchases, rather than the creation of new national banks.

Keywords: Banques, Barrières à l’entrée, RDC
Codes JEL : G21, G24, G28


ABSTRACT

Since 2010, the banking industry in the Democratic Republic of Congo has lost a quarter of its banks, from 20 to 15, raising questions about its condition. In attempting to answer the question of whether this industry is conducive or hostile to new entry, the paper analyzes a series of indicators or factors and finds that several of them are likely to discourage new entry while the fewer ones that may be favorable signals would require either reforms or investments to activate them. The analysis indicates that the current configuration of the Congolese banking sector, as revealed by these various indicators and factors, would be more favorable to the establishment of foreign banks, particularly African banks, through asset purchases, rather than the creation of new national banks.

Key words: Banking, Entry barriers, DRC
JEL codes:
G21, G24, G28

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