Commercial banks in the country’s economy have always played a significant role. When it comes to sending money online, they play a crucial role in the growth of Gambians. They serve not only as of the protector of the land’s riches but also as the country’s resources, essential for the nation’s economic growth. On the same side, commercial banks are also responsible for the transfer of money to and from a country. Many commercial banks work as a payout partner of international money transfer companies, and help people send money to Gambia for their loved ones.
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Factors Of How Banks Play A Role In Development:
Factors listed below are the ways how banks play a role in the development of a country
- Capital Build-up
Banks play an essential role in the creation of capital, which is necessary for a country’s economic growth. They were making small savings available for productive purposes and distributed over a vast area through their network of branches across the world.
- Credit formation
Banks are generating credit to provide additional funds for construction projects. Credit development leads to higher demand, wages, sales and prices, and therefore to faster economic growth.
- Funds for efficient investment Channeling
Banks are spending their savings for profitable purposes. The only feature of commercial banks is not capital accumulation. In order to improve national productivity, pooled savings should be allocated to different economic sectors; only then, a significant role in the country’s economic growth can be said to have been played.
Development In The Gambia And The Role Of Commercial Banks:
In the past 2-3 decades, Gambia’s Banking industry has undergone profound changes with major financial sector reforms.
Over the last two decades, the Gambia’s banking sector has undergone significant and extensive changes. With government deregulation accompanying banks, financial developments, and the knowledge revolution, globalization has created a dynamic banking climate. Because of these changes and innovations in the modern banking industry, banks are trying to function more efficiently to remain competitive.
The Gambia has 12 commercial banks, one of which is an Islamic bank. The Central Bank of the Gambia supervises the banking system. The sector is dominated by subsidiaries of Nigerian banks, though these subsidiaries are relatively independent of their parent institutions and are usually majority-owned by Gambian entities.
The banking system is highly liquid, and most banks are profitable. Most banks meet the requirements of Central Banks in terms of capital adequacy and liquidity.
Gambia’s banks actively contribute to the development of the country by building capital through different streams and engaging people in other businesses by providing them with low-interest loans.
Gambia’s banking industry has boosted the country’s economic performance as it encourages the diaspora to send money to the Gambia through efficient and less costly channels like ACE Money Transfer.
Open account arrangements for cross-border transactions are rare since there are only a few Gambian distributors, many of which are not known internationally. Still, some like ACE Money Transfer are known internationally for their efficient and fast service.
