The Central Bank has decided to lift the ban on banks belonging to the West African Monetary Economic Union (UEMOA) from granting loans to their shareholders, in particular governments.

Banks are now temporarily allowed to grant loans to shareholders. In a press release dated 11 April, “credit institutions are authorized to temporarily exclude the public securities they hold in their portfolios from the scope of application of the prudential standard on loans to major shareholders, managers, staff and auditors.” This decision, which takes effect from the date of signature, primarily targets banks with states in turn.

Indeed, the Central Bank is targeting the Agricultural Bank of Burkina Faso, 87.56% controlled by the Burkinabe State via public bodies, or the Banque Commerciale du Burkina, currently owned equally by Burkina Faso and Libya, through the Libyan Foreign Bank. In fact, the institution, ranked sixteenth in the UEMOA zone, with 848.4 billion CFA francs in assets (1.29 billion euros) in 2021, has fallen into the fold of a quartet of public financial institutions led by the National Investment Bank. According to an industry analyst, this measure aims to help banks issue more loans, while rising policy rates have tightened credit to the economy