Cape Verde blends stunning scenery with a modern and efficient financial services sector. Photo Provided to China Daily

Safe and secure, Cape Verde's banking industry is expanding with the support of China

Cape Verde's banking sector has enjoyed significant growth since the start of the century, with its conservative approach supported by significant investment in state-of-the-art technology and modern and transparent banking practices.

Despite the financial crisis in Europe, the country's financial services industry has escaped the worst of the economic turmoil and is well positioned for future growth through greater public investment and more efficient operations in the open market. In a detailed economic outlook report on Cape Verde released last year, the African Development Bank outlined some of the challenges facing the financial services industry and suggested ways the sector could develop.

"The banking sector needs to become more competitive and increase its contribution to economic growth," it said. "As Cape Verde continues its economic development in the context of a decline in cheap international financing, the domestic financial sector will need to play a more prominent role in financing economic activity through adaptive mechanisms (including syndication) and public investment, through more efficient open market operations."

Prime Minister Jose Maria Pereira Neves is confident the Cape Verdean financial market will continue to maintain its impressive growth momentum, with major investment from international banks and financial services providers playing a key role in this aim.

"As a small economy we still have some obstacles to overcome in terms of accessing finance,due to the size of our banks," he said. "When we need big investments, we recourse to international banks or other financial institutions to fund projects. Here the partnership with China would be critical because first we have to open credit lines to local banks.

"Caixa Economica de Cabo Verde has formally organized credit lines to micro, small and medium enterprises with the China Development Bank. We must continue with these partnerships."

Credit supports growth

Founded in 1928, Caixa Economica de Cabo Verde transformed into an autonomous financial institution in 1985 and eight years later became a limited liability company rather than a public company.

Known for its high level of technological modernization and innovation, the bank has invested in a comprehensive revamp of its corporate identity, which includes a new, eye-catching color logo, and has moved into a gleaming new headquarters in Praia.

One of only two banks in Portuguese-speaking countries worldwide to achieve the coveted ISO 9001 and ISO 27001 certifications for quality and security of information, Caixa Economica de Cabo Verde presently holds a 31 percent share of the country's lucrative banking and financial services market.

The bank has identified internationalization as a key area for growth, particularly remittances from the US and countries with large populations of Cape Verdeans. As a result, Caixa Economica de Cabo Verde has initiated a memorandum of understanding for credit lines from the China Development Bank for various development projects, and is courting partner banks in China with an eye to establishing partnerships.

"The relationship we have with China is a very productive one despite the huge difference in size between the two countries," said Caixa Economica de Cabo Verde Chairman and CEO Emanuel Miranda.

Despite its relatively small size, Cape Verde can serve as the pivot for any Chinese investor looking to invest in the Economic Community of West African States region. Cape Verde is the ideal gateway to the region."

Turning to Caixa Economica de Cabo Verde's strategic development plan, Miranda believes the on-going global financial crisis will restrict the bank's growth potential but is more optimistic about the medium- to long-term.

"Our long-term vision and dream is to have agencies in every country where we have a considerable number of diaspora. However, in the short term, we are implementing partnerships in order to facilitate business growth. We use local banks to offer services of Cape Verdeans working abroad. In China we are following a very specific strategy. We are currently the only Cape Verdean bank to have direct ties with China, namely with the Bank of China, and the MoU with China Development Bank .

"Our growth strategy is aligned with the national strategy for economic development and we could well become a development bank in the future in order to specifically develop large national projects. Caixa Economica de Cabo Verde is always first in line when it comes to opportunities, hence why we are playing a key role with China."

(China Daily 03/01/2013 page6)