Mauritania’s financial sector has grown exponentially in recent years. In less than ten years, the number of banks has almost doubled in the country which had 10 in 2008, and today there are more than 20 of them.
Ironically however, the banking rate is still too low, standing at 9%, up 4 points from 2010. Nevertheless the rate is still close to that of West Africa’s Economic and Monetary Union which is 10%, a figure which economists doubt.
Mohammed El Hacen is a Mauritanian accountant and a financial advisor and he says: “The rate jumped to a double digit figure in a short period; in just two or three years, i don’t think the figure is credible. First, because the banking rate depends by many factors: banking, economic and financial developments. So the passage of 6 to 10% seems high and a little excessive. That’s why we say that these statistics are unreliable. “
The low banking rate has been as a result of lack of confidence in conventional banks by Mauritanians due to unregulated interest rates that do not conform to Islamic law recommendations. To balance the scales, some banks have found a solution by establishing Islamic services, which are considered more reliable.
“Mauritania, as you know, a 100% Muslim country. So this new alternative to offer Islamic financial services is a new opportunity that people are trying to use to in order to move towards Islamic banks that operate in conformation to Sharia,” says Mahmoud EL Hacen, a director of bank operations.
Another factor that could explain this low rate of banking, is the attitude of banks, which are often accused of serving only the interests of the groups to which they are affiliated. The situation is challenging to Mauritanian authorities who are already aware of the local banking sector dilemma which they say is in need of comprehensive reforms.