Djiboutian bank sector: an unequalled freedom
COMPOSITION
Commercial banks have to obtain the required approval for any establishment of activities in Djibouti. It means that the bank have to hold 30% share of a credit company or benefit from an stand-by agreement of financing in currencies by an internationally well known bank company and the Djiboutian central bank’s norms have to be respected at the same time.
ASSETS
The Djiboutian financial place has a reliable and modern bank system (leaned on international bank groups with AAA grading type) as well as monetary policy that defines the freedom of capitals movements and the change control does not exist. Djiboutian currency is also stable and freely convertible (this currency is linked to the American dollar by a fixed parity since March 1945) and this situation favours foreign deposits entry on home place. This free convertibility of Djiboutian franc, which ensures its stability, is provided by the “currency board” monetary system. All those assets attract foreign capitals on deposit in the different banks of the place, before being transfer to the market of Eurocurrencies or injected in the Djiboutian economy.
The minima capital amount of financial and bank institutions or the minima allocations in capital for the branches or institution agencies, which head office is located in foreign countries is 300 million FD.
In addition, any economic involved party, resident or non resident in the country can without any period of time open an account. An important freedom of money transfer all over the world tanks to appropriate regulations; represent one of the Djiboutian advantages.
PROSPECTS
In the perspective of a larger opening to international financial markets, financial institutions can be lead to propose new products and services such as leasing, young business man credit, financial engineering etc…
The geographic position with the political and economic stability lead to development of bank sector and make Djibouti an attractive country full of benefits.