Financial Sector Assessment : Burundi
The financial sector, dominated by the banks, is vulnerable to external shocks. The country is exposed to terms of trade shocks mainly from coffee and oil prices, which could impact banks through real sector effects. The banking system is also vuln...
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| Language: | English en_US |
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Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2009/12/11575473/burundi-financial-sector-assessment http://hdl.handle.net/10986/15919 |
| Summary: | The financial sector, dominated by the
banks, is vulnerable to external shocks. The country is
exposed to terms of trade shocks mainly from coffee and oil
prices, which could impact banks through real sector
effects. The banking system is also vulnerable to a decline
in external assistance which funds nearly half of the
government on which a large share of the economy depends.
Burundi has not been directly affected by the international
crisis, but second round effects are likely to impact growth
and foreign aid prospects The Bank of the Republic of
Burundi (BRB) is making major efforts to improve the
regulation and supervision of the financial institutions
under its responsibility, but it continues to face
significant obstacles The microfinance sector is facing
major challenges, and its supervision reflects the
constraints affecting the BRB. All the on-site inspections
organized by the BRB revealed serious problems and
violations of prudential rules, in particular in the areas
of accounting, governance, or the absence of reliable
internal controls. In order to put the industry on a sound
footing, it is essential to: (i) update the regulatory
framework to facilitate the growth of a sound industry and
introduce a specific chart of accounts; (ii) develop
supervision that is capable of preserving the health of the
sector, and of deposits in particular; and (iii) promote the
professionalization of the industry itself, with improved
human capacities, appropriate management tools, modern
methodologies, and good governance. |
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