BGFIBank and UGB control approximately 75% of Gabon’s credit market, according to Sika Finance. While a broader decline in credit costs across the CEMAC zone is increasing investment attractiveness, according to Financial Afrik, borrowers in Gabon continue to face high borrowing costs, as reported by Agence Ecofin.
- Market Concentration: Two banks hold three-quarters of all financing granted in Gabon.
- Regional Divergence: CEMAC-wide credit costs are falling, but Gabon’s rates remain stubbornly high.
- Investment Outlook: Lower regional rates are reviving financial investment interest across Central Africa.
Why two banks dominate Gabon’s credit market
A high level of market concentration defines the Gabonese banking sector. According to Sika Finance, BGFIBank and UGB collectively control nearly 75% of the credit market. This dominance means a vast majority of all financing granted to businesses and individuals flows through just two institutions.
In economic terms, such concentration often limits competition. When a few players hold the majority of market share, there is less pressure to lower interest rates or diversify loan products to attract borrowers, which can contribute to the stagnation of credit costs for the average consumer.
How CEMAC credit trends contrast with Gabon’s costs
There is a growing gap between regional monetary trends and the local reality in Gabon. Financial Afrik reports that a general decline in the cost of credit across the CEMAC (Central African Economic and Monetary Community) zone is renewing the attractiveness of financial investments. Lower rates typically encourage companies to borrow for expansion and investors to move capital into the region.
However, this regional trend has not fully trickled down to Gabonese borrowers. Agence Ecofin reports that credit remains expensive in Gabon, questioning why the cost of borrowing persists at high levels despite the broader regional shift. This divergence suggests that local risk premiums or the aforementioned market concentration may be offsetting the benefits of the CEMAC zone’s lower rates.
The role of government in real estate development
The challenge of expensive credit intersects with national infrastructure goals. According to Direct Infos Gabon, Mays Mouissi is currently tasked with managing real estate projects in an environment where previous attempts by others have failed.
Real estate development is highly sensitive to interest rates. High borrowing costs increase the expense of construction loans and mortgages, often stalling large-scale housing projects. The success of these initiatives depends on whether the government can navigate these financial hurdles or secure more favorable financing terms for developers.
