FINANCIAL SECTOR TECHNICAL ASSISTANCE PROJECT

closed

Closed

The global objective of the project is to improve the efficiency of the Niger financial system so that it can fulfill its important role of contributing to growth and poverty reduction. The project has the following six components: Component 1) a favorable environment within which financial institutions operate is a necessary condition for a successful restructuring of the financial sector. Two areas have been identified as retarding factors in the development of financial institutions: Government arrears and the legal/judiciary framework. In addition, the lack of financing of small and medium-sized enterprises (SMEs) remains a concern and an issue is how to make the environment more conducive to SME financing. Component 2) of the four banks identified as problematic, the restructuring of two of them, Banque Commerciale du Niger (BCN), and Banque Islamique du Niger pour le Commerce et l'Investissement (BINCI), is close to completion. The project will monitor progress with the restructuring of these two banks, but it will mainly focus on Credit du Niver (CDN) and Caisse de Pret aux Collectivites Territoriales (CPCT). Component 3) Micro-finance institutions and the postal financial services bring financial intermediation to the neighborhoods in towns and cities and to rural areas. Component 4) Social security affords much needed protection to the workers (against work related accidents and illnesses), to the young (through family allowances) and to the old (through the pension system). The Caisse Nationale de Securite Sociale (CNSS) which provides coverage to salaried workers is bankrupt and suffers from a liquidity shortage; its reach is very limited, less than 10 percent of the population, and it does not offer some products (such as health care). The imbalance between benefits paid and contributions collected increases each year and constitutes a serious public finance risk. Component 5) All studies of the financial system of Niger have underscored the capacity deficiencies at all levels. The project will contribute to fund capacity building in commercial banks, insurance companies, micro-finance institutions, the postal bank, as well as within the Ministry of Finance to reinforce the department of money and credit and the division of insurance. Component 6) The Credit will fund the costs of project management, including four staff, and equipment.

FY17 - Financial Sector

World Bank Group

Project

Commercial, Government