Congo Central Bank Takes Over Afriland Amid Concern of Contagion

The intervention was necessary due to Afriland’s shareholders and directors incapacity “to undertake corrective actions, notably a recapitalization, control of structural costs, as well as the restoration of good governance and compliance with various prudential norms,” according to Kabedi Mbuyi. There was also a need to safeguard the public’s savings and preserve the Congolese banking system’s stability, she said.

Afriland, which has units across Africa, was founded in Cameroon in the 1980s and was granted a license to operate in Congo in 2005. A representative at the group’s holding company in Switzerland wasn’t immediately available when contacted by phone Thursday.

Patrick Kafindo, who’d been acting as the Congo unit’s chief executive officer, said in an email that he couldn’t comment on the lender’s activities now that the central bank has taken it over.

The Association of Congolese Banks welcomed the decision, saying in a statement sent to Bloomberg “this proactive approach should normalize the situation” at the bank. 

Afriland’s Congo unit has faced scrutiny since whistleblowers shared data two years ago with journalists and anti-corruption groups showing the lender had made a business of welcoming risky clientele.

Source: Bloomberg Business News