Publication: Country Economic Memorandum for Sao Tome and Principe - Background Note 8: How to Increase the Availability of Financing Needed to Stimulate Private Sector Investment? A Review of the State of and Barriers to Access to Financial Services in São Tomé and Príncipe
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Date
2019-06-26
ISSN
Published
2019-06-26
Author(s)
Barreto, Rúben
Vicente, Carlos Leonardo
Abstract
This note discusses the current
structure of the financial sector in São Tomé and Príncipe
(STP) and the main obstacles preventing mobilization and
allocation of more resources to private sector investment.
Since 2012, credit to the private sector in STP has been
declining and is currently below peers. In an economy
dominated by informality, banks provide credit to a limited
number of borrowers, prioritizing large borrowers. A survey
completed in 2017 showed that only 18 percent of micro,
small and medium-sized enterprises (MSMEs) reported being
registered and having a bank account, of which only 3
percent had access to credit. The same survey showed that
only 39 percent of individuals, some of them owners of
micro-enterprises registered under their personal name, have
access to financial services. The note is divided into four
sections. The first provides an overview of STP’s financial
sector, analyzing and benchmarking its structure, depth, and
soundness. The second section analyzes the landscape of
access to financial services (focusing on individuals and
MSMEs), while the third describes some of the key
limitations of the financial infrastructure in STP that
create obstacles to financial sector development and access
to finance. Finally, the fourth section concludes with
policy recommendations that can help increase access to
financial services in STP.
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Citation
“Barreto, Rúben; Vicente, Carlos Leonardo. 2019. Country Economic Memorandum for Sao Tome and Principe - Background Note 8: How to Increase the Availability of Financing Needed to Stimulate Private Sector Investment? A Review of the State of and Barriers to Access to Financial Services in São Tomé and Príncipe. © World Bank, Washington, DC. http://hdl.handle.net/10986/32133 License: CC BY 3.0 IGO.”