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Development Research Briefs - Lengthening Financial Contracts, an Issue in the West Africa Economic and Monetary Union (WAEMU) Region


The key constraints faced by the banking sector in the region include the following:

• The main source of long term funding for banks is time deposits (over 24–month maturity);

• The regulations by the Banque Centrale des Etats de l’Afrique de l’Ouest- (BCEAO) stipulate that the ratio of medium and long term loans to time deposits (transformation ratio) must not exceed 25 percent;

• High corporate tax rates are a serious burden and restrict the amount of available resources to be leveraged by banks (Table 1).

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