Methods of Payment
Most commercial banks in The Gambia provide trade finance instruments such as letters of credit. These letters of credit usually need confirmation by a U.S. commercial bank. However, since the cost of financing is generally high, bank-intermediated trade finance is not as common as in other countries. Open account arrangements for cross-border transactions are rare since there are only a few Gambian distributors, many of which are not known internationally. Consequently, many Gambian importers pay exporters directly before delivery. Unless there is a pre-existing relationship with a Gambian distributor, an open account arrangement is not recommended. U.S. exporters are advised to use letters of credit or demand pre-payment. All major credit and charge cards are used in The Gambia, including Visa and MasterCard, however, many businesses are not set up for accepting credit card payments and cash payment is generally preferred by local businesses. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide available at https://www.trade.gov/trade-finance-guide-quick-reference-us-exporters.
The Gambia has 12 operational commercial banks, with a total asset of $1.3 billion end of 2021. The banking system had been adequately capitalized, liquid and profitable with capital adequacy ratio of 32.6 percent in December 2020. The sector is dominated by subsidiaries of Nigerian banks (50 percent of the industry), though these subsidiaries are independent of their parent institutions and are usually majority-owned by Gambian entities. The two largest banks account of $506 million or 40 percent of the industry total assets.
While the sector is profitable, local banks disproportionately depend on government assets (treasury bills) to invest . Though the Gambian Government’s most recent auctions have featured dramatically lowered interest rates, lending to individuals and businesses is still not seen as profitable for the banks. As a result of the lack of a competitive consumer and business finance market, interest rates are prohibitively high.
The Gambia has a central bank system. Foreign banks or branches can establish operations in The Gambia, following the country’s banking regulations. Ther e are no restrictions on foreigners opening a bank account and there no large peculiarities of the Gambian banking system that may impact U.S. businesses.
Foreign Exchange Controls
The foreign exchange rate is a managed float. Typically, the exchange rate fluctuates based on supply and demand factors. While the government occasionally intervened in the foreign exchange market during the Jammeh regime, the current administration has not done so.
U.S. Banks and Local Correspondent Banks
The Gambia has one U.S. owned bank:
Vista Bank (Gambia) Limited
No. 2 Kairaba Avenue, KMC
P.O. Box 1997
Tel: +220 439 6580 / +220 373 1565
To access The Gambia’s ICS section on financing, visit the U.S. Department of State Investment Climate Statement website.