AfrAsia International Bank of Madagascar SA

The AfrAsia International Bank of Madagascar SA (AIBM) is being established in a joint venture between MCDP and AfrAsia Bank from Mauritius, as a new banking institution with an aim to strengthen the Madagascan banking system. Madagascar is in the early development stage with less than 2.0% of the 20 million population having a bank account, yet with accelerating GNP growth rates averaging 7.2% over the last year. Foreign investment in mining, agriculture and tourism has risen from US$ 57M in 2005 to more than US$ 700M in 2006 and US$ 3B in 2007. International tradewith Indian Ocean and Asian nations is outstripping traditional trades with Europe.

The existing eight banks are all foreign with five French banks dominating the industry. These are mainly run from Paris and are slow to react. No other bank is seriously focusing on Madagascar’s links with Mauritius, Asia and Australia. Banking margins are high in Madagascar with average cost of funds at 1.0% versus an average Prime Lending rate of 14.8% plus 2.0%.

AIBM is expected to commence operations in 2010 and will provide Madagascar with a professionally managed Bank to provide traditional banking services from its head office in Antananarivo.