Central Bank of the Comoros Driving Economic Growth and Development

The Central Bank of the Comoros is playing a crucial role in driving economic growth and development in the country. It has been actively working to improve the financial sector and promote economic stability.

The bank has implemented various initiatives to increase access to financial services, including mobile banking and microfinance programs. These efforts have helped to reduce poverty and increase financial inclusion.

The Central Bank of the Comoros has also taken steps to strengthen its regulatory framework and improve the overall resilience of the financial system. This has helped to build confidence among investors and promote economic growth.

By driving economic growth and development, the Central Bank of the Comoros is helping to improve the standard of living for its citizens and create a more prosperous future for the country.

The Central Bank of the Comoros plays a crucial role in the country's banking system.

The Comorian banking system is made up of six different banks, including the Central Bank (BCC), and two mutual savings banks, SANDUK and MECK.

The Central Bank of the Comoros is responsible for approving the establishment of new banks on all three islands of the Union of Comoros.

Here are the six banks that make up the Comorian banking system: the Central Bank (BCC), the Banque pour l'Industrie et le Commerce des Comores (BICC), the Banque de Développement des Comores (BDC), the Banque Fédérale de Commerce (BFC), the Exim Bank Comores SA, and the Société Nationale des Postes et des Services Financiers (SNPSF).

These banks work together to provide financial services to the people of the Comoros, and the Central Bank plays a key role in overseeing this process.

Comoros started 2022 with a pickup in domestic activity as the pandemic subsided and lockdown measures were gradually lifted.

The number of recorded COVID-19-related infections and deaths has remained relatively low, thanks in part to the government's response plan and vaccination campaign, with close to 40 percent of the population now fully vaccinated.

Economic activities stagnated during 2020-21, but Comoros benefited from substantial inflows and aid from the diaspora and development partners, including the IMF emergency financing provided under the RCF/RFI of April 2020.

Growth was expected to accelerate in 2022 amid re-opening activities, with a projected growth rate of 3.8 percent, but this has been revised down to 2.4 percent due to the war in Ukraine and soaring inflation.

Public revenue fell significantly, driven by substantial losses at state-owned enterprises as they absorb the high commodity prices, widening the public debt.

The economy is projected to grow by only 3 percent in 2023, with prospects remaining challenging due to the ongoing impact of the war in Ukraine and high commodity prices.

Comoros is a small island nation with a predominantly informal economy and limited financial infrastructure. The country has a Central Bank of Comoros, which regulates the country's three main commercial banks and several microfinance institutions.

The banking sector in Comoros faces challenges such as undercapitalization and limited access to financial services, particularly in rural areas. This is reflected in the fact that only 25% of the Comorian population has a bank account.

The regional average for bank account ownership is 55%, which highlights the significant gap in financial inclusion in Comoros. Recent efforts have focused on improving financial inclusion and digitizing the financial ecosystem.

In 2024, Comoros initiated its first National Financial Inclusion Strategy (NFIS), which aims to address low banking penetration and encourage the use of digital financial services. This strategy includes measures to promote financial literacy and encourage greater engagement with the nation's banking system.

Comoros has also joined the Pan-African Payment and Settlement System (PAPSS), a platform designed to facilitate cross-border transactions in local currencies across Africa. This has enabled Comorians to make payments to other countries directly in Comorian francs, reducing costs and delays.

The Central Bank of Comoros is working to modernize the financial sector through initiatives to promote digital payments and financial inclusion. While open banking is not currently on the agenda, several initiatives are already in play that highlight a possible development in the near future.

Progress will depend on regulatory reforms, infrastructure investments, and collaborative efforts among stakeholders.

The Central Bank of the Comoros is actively involved in the fintech and payments sector. It has introduced a mobile payment system called M-Pesa, which allows users to make transactions using their mobile phones.

This move is aimed at increasing financial inclusion and providing a convenient way for people to access banking services. The Central Bank has also partnered with local banks to promote the use of digital payments.

The adoption of fintech and digital payments is expected to boost economic growth and reduce the reliance on cash transactions. By doing so, the Central Bank is also reducing the risk of money laundering and other financial crimes.

The regulatory framework for fintech and payments is complex and constantly evolving. It's overseen by various government agencies and organizations, including the Financial Conduct Authority (FCA) in the UK and the Payments System Regulator (PSR).

In the UK, for example, fintech companies must comply with the Payment Services Regulations 2017, which govern payment services and e-money. These regulations require fintech companies to obtain licenses and follow strict guidelines.

The European Union's Payment Services Directive (PSD2) also plays a significant role in shaping the regulatory landscape for fintech and payments. It requires banks to provide access to customer data and payment accounts for third-party providers, enabling innovations like open banking.

Fintech companies must also adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations, which are designed to prevent financial crimes.

The Head of Payments plays a crucial role in the Fintech industry. They oversee the development and implementation of payment systems, ensuring seamless transactions and secure financial data.

In this role, they must stay up-to-date with the latest payment technologies, such as real-time payments and mobile wallets. These innovations have reduced payment processing times and increased consumer convenience.

A Head of Payments must also be familiar with regulatory requirements, like the Payment Card Industry Data Security Standard (PCI DSS). This standard ensures the secure storage and transmission of sensitive payment information.

Effective communication is key in this position, as they must collaborate with cross-functional teams, including developers, security experts, and business stakeholders. Clear and concise reporting is essential to drive business decisions and strategy.

The Head of Payments must also be data-driven, analyzing metrics such as payment volume, transaction rates, and customer satisfaction. This data informs decisions on system enhancements, new feature development, and marketing initiatives.

Their expertise in payment systems and industry trends enables them to identify opportunities for growth and improvement, driving innovation and revenue in the Fintech space.

Program implementation is a crucial aspect of Fintech and Payments, and it's interesting to see how some countries are meeting their targets. Tax revenue reached KMF 45.7 billion, substantially higher than the program floor of KMF 41.9 billion.

The domestic primary deficit amounted to KMF 18.0 billion, below the adjusted program ceiling of KMF 19.5 billion. This shows that the authorities are making efforts to manage their finances effectively.

However, cash transfers to the poor of KMF 5.2 billion fell slightly short of the target of KMF 5.8 billion. This was due to logistical difficulties related to the COVID-19 pandemic.

The authorities met all three end-December 2021 structural benchmarks and one of three end-February 2022 ones. This is a positive step towards implementing reforms in the Fintech and Payments sector.

Here are the structural benchmarks that were met:

Reforms related to the restructuring of the postal bank SNPSF and the anti-corruption law proved to be more complex than anticipated. However, progress has been made, and the authorities are committed to continuing to engage with the IMF to push forward these reforms.