Are 13 Banks Too Many for Gambia?

Bankers divided in opinion

The question of whether 13 banks in The Gambia are too many for The Gambia with about 1.8 million people (2010 estimates) is hot in the hearts and minds of many people, especially financial players and banking practitioners in the country, who have divergent views over the issue.

The influx of banks in the country over the years has made the country a highly competitive financial sector in Africa.

With a banking population of less than 25% of about 1.8 million people, it is just normal that concerns are raised on whether 13 banks is not too much for the system, which is why some senior  bank officials continue to make viable comments on the issue, with some nursing the view that “Gambia is too small for 13 banks”.

Dodou Nyang, Sales and Marketing Manager of Trust Bank

For instance, Trust Bank Sales and Marketing Manager Dodou Nyang is reported to have said that The Gambia is too small for 13 commercial banks, hence making the country the most competitive banking country in Africa.

This is partly responsible for the failure or bad performance of some banks in the last two years, says Mr Nyang, who is of the view that in the next two to three years, there would be more bank failures “because the country is too small for 13 banks”. 

“Inevitably, the Gambian banking industry will be reduced to may be seven, six, or eight banks at the most in the next five years,” Mr Nyang said.

According to statistics, Gambian banking industry has a clientele base of about 300,000, which makes it intensively competitive and gives the customer great advantage. 

However, there is yet to be any reported case of a bank failure over the last two years due to intense competition.  The only bank that has so far closed down in recent times is Oceanic Bank, which was reported to be due to a decision taken by its parent company in Nigeria, Oceanic Bank Plc. 

The Nigerian banking firm last year opted for a national licence, which means it has to close down all subsidiaries in countries other than Nigeria.

Earlier on, some other top mandarins in The Gambia’s banking industry had commented on the number of banks operating in the country. 

“The competition in the industry is stiff no doubt, but the banking terrain in The Gambia provides a lot for all the banks. I do not therefore think the number of banks is too much for the entire economy,” said Emeka Anyaegbuna, managing director and Chief Executive Officer of Zenith Bank Gambia Limited, the latest entrant in the country’s financial industry.

Mr Anyaegbuna, MD/CEO of Zenith Bank Gambia

The highly experienced banker said the number of banks in the country creates room for competition and opportunity for banks to render better services, which is better for the banking system and the economy.  “So banks are not too many,” Mr Anyaegbuna said, contrary to Mr Nyang’s belief.

He added:  “I think [13 banks] is a sizeable number for the economy. If you look at it in terms of the population and you begin to divide it in terms of numbers you feel that - yes - the banks are too many but if you look at it vis-à-vis the businesses on the ground I think the banks are not too many. The businesses are enough to contain the number of banks and for me it is only those who are strategic that will survive with time.”

For the Managing Director of Arab Gambian Islamic Bank (AGIB), Dr Sirajo Salisu, officials of the Central Bank of The Gambia must have seen reasons for them to issue licences to all the banks in operation. 

Mr Sirajo believes that the more the number of banks in the country, the more people have variety of quality services to choose from, which is the essence of competition.

“If you have just one or two banks, there is no variety for the customers,” he says. “If you have one or two banks they may be doing whatever they feel like.  If there are more than two banks then people have various services to choose from.  So those people who think that in The Gambia banks are too many they may have their reasons and for those who think banks are not many they also have their own reasons. But for me, as far as I am concerned, we have only two banks in the country and that is Islamic Bank and the other conventional banks.

“To me, I see all the other banks as partners in progress; I never see them as competitors; we join hands together and bring development into the society.”

Mr Sanusi

The former managing director of GTBank Gambia, Olalekan Sanusi, once said it is not the size of a country that can determine how profitable a bank can be; rather it is the level of innovation of a bank that can determine how a bank can perform even in the
middle of competition.