Financial Sector Development

Many a pundit has pointed out that the financial sector is vulnerable to instability in developing markets. The reality is that the financial sector is subject to volatility in all markets. At all times. The only way to flourish in any market is to have a solid understanding of the fundamentals and an iron grip on change. For change there will be.

Private capital flows to developing countries now substantially exceed aid flows and are the driving force for economic development. In fact, annual remittances to emerging markets are now three times those of development aid. Capital market instruments are replacing plain vanilla bank loans. International regulations aimed at money-laundering and terrorism-financing mean tighter restrictions. Increased taxation impacts business decisions.

With the right skills, most change provides as many opportunities as threats. We have the skills needed to help national and regional financial sectors thrive in the face of global change. Those skills include an unsurpassed strength in quantitative financial and economic analysis using advanced techniques including comparative institutional maturity modelling. They include an exceptional track record in producing innovative yet pragmatic strategies. And, unique among consultancies, we help clients to drive those strategies through to successful conclusions.

We provide market research, product development and reform of financial institutions. We provide feasibility studies and cost benefit analysis. But, most importantly, we create environments in which financial sectors can flourish.

Market Development

Rigorous research allows us to pinpoint market needs and opportunities for countries and their financial institutions: we recently advised the government of Rwanda on how to develop the country as a financial hub.

We advise on capital market expansion and product introduction, and promote market intermediaries.

We have specialists in online/mobile products and platform development. Which means we’re adept at setting up systems like smartphone distribution of pensions in Uganda.

We have a faculty for identifying and designing financial products for the diaspora, the informal sector and the poor. That includes bonds, flexible, cost effective savings and pensions products.

We have a reputation for accurately valuing emerging markets’ assets.

Strengthening financial institutions and markets

We are the undisputed market leaders in this area, with substantial repeat business from DFI clients. who benefitted from our services. Among the many who have prospered and returned are the African Development Bank, the ECOWAS Bank, the Caribbean Development Bank, and the East African Development Bank. They came back for institutional strengthening, innovative market and product development, and solutions to technical financial issues, coupled with meticulous implementation. A rare combination.

Delivering successful solutions demands an extensive range of services. We have it:

• We have the expertise to satisfy the widespread need to strengthen governance.
• We are currently working to promote women in banking in central Asia.
• Our experience in reforming and modernising financial institutions and markets is unrivalled.
• Working with the IMF, we drew up plans for foreign exchange liberalisation in Tanzania and Uganda, which were fully implemented and lead the economic revitalisation of these two economies.
• We strengthened industrial and SME financing in Pakistan and six Caribbean countries.
• We developed infrastructure financing in Poland, East Africa, and through the Private Infrastructure Development Group (PIDG).
• We have recently modernised agricultural banks in Romania and Tajikistan. Our Making Finance Work for Africa project alleviated financial bottlenecks in agricultural value chains.
• Deposit insurance schemes throughout the EU, China and Venezuela were reformed following our advisory work.
• We worked for over three years to develop the First MicroFinance Bank (sic) of Tajikistan from its inception to become one of the world’s most successful microfinance institutions.
• We advised on the reform of pension schemes in Sri Lanka.
• We are ideally qualified for identifying profitable new products and services for emerging markets.
• Securities markets in Moldova, Tanzania, and Ethiopia have been strengthened by our advice. In Moldova we devised an electronic trading platform and supported the first public government bond issue.
• We are masters at matching organisational structures to new products and services.
• We institutionalise development project outcomes, monitoring and evaluation for DFIs, including the East African Development Bank and the Caribbean Development Bank.
• We produce operational and legal documentation.
• Training financial sector staff supports our reforms: the EADB and commercial banks in Kyrgyzstan, Romania and Bulgaria have benefitted from our tailor made programmes, as have bond market participants in Sri Lanka.
• We identify and act on domestic and OECD regulatory strengthening requirements.
• We advise on financial sector regulation: we draft regulations for all financial market sectors: banking, insurance, capital markets, micro-finance, credit unions, collective investment schemes, and financial advisers: we developed comprehensive regulations for the financial sectors in Bhutan and Barbados.
• The NORSAD Fund brought in outside investors and relocated from Zambia to Botswana following our advice.
• Our modelling of financial regulation and innovation consistently proves invaluable as do our estimates of the impact of regulations. Our definitive assessment of the impact of EU regulation on Caribbean offshore financial centres is a good example.

Delivering value for money

We produce real financial and economic benefits for our clients. Thanks to our involvement, ECOWAS Bank in Africa, Electra in Cape Verde and Savings Bank in Albania all profited from sales of shares well above their book value.

We develop effective strategy and medium term planning for financial institutions. The East African Development Bank substantially strengthened its position on the back of our advice.

We reform and modernise financial institutions. The central banks of Bangladesh and Egypt and the Preferential Trade Area Bank all benefitted from improved performance following our reforms. As have numerous smaller banks and institutions.