The banking sector of the Democratic Republic of Congo (DRC) was recently at the heart of an in-depth analysis carried out by Professor Bob Divid Nzoimbengene Luyindula, business expert and chartered accountant. In his work entitled “Banks: governance and prudential management”, published by L’Harmattan, Professor Luyindula highlights an alarming reality: the low level of performance of banks operating in the DRC.
Based on criteria such as the credit/GDP ratio, the capacity to finance industries and the balance sheet total, Professor Luyindula classified the banks of the DRC into categories of “medium banks” and “very small banks”, all with scores below 25%. This classification highlights a bitter observation: no bank in the DRC has managed to obtain a score higher than 0.75, thus highlighting the major challenges facing the Congolese banking sector.
The implications of this analysis are profound. Indeed, the low level of performance of banks hinders their ability to fully play their role in the national economy. With a declining intermediation rate and a preference for securing deposits to the detriment of financing the real economy, banks in the DRC face major challenges that hamper the country’s economic development.
However, despite these obstacles, it is important to recognize the progress made by the Congolese banking sector over the years. Indeed, the total balance sheet of banks in the DRC has experienced significant growth, going from less than 200 million dollars in the 1990s to 15.5 billion dollars in 2022. This development demonstrates the desire of players in the financial sector to contribute to the economic development of the country.
Professor Luyindula’s book thus offers a valuable contribution by providing a tool for categorizing and classifying banks in the DRC, allowing sector players, regulators and researchers to better understand the issues and challenges facing the Congolese banking sector. .
In conclusion, the in-depth analysis conducted by Professor Luyindula highlights the challenges and opportunities facing the DRC banking sector. While highlighting current weaknesses, it highlights the need for effective governance and prudential management to enable Congolese banks to fully play their role in the country’s economic development.