Methods of Payment

For international transactions, Madagascar uses several payment methods including open account, letter of credit, cash in advance, and documentary collections where a bank exchanges/delivers shipment documents under orders from a shipper’s bank. Credit cards (Visa, MasterCard, American Express, Eurocard and Diners) are accepted by larger hotels and restaurants. The most widely accepted card is Visa. Most shops will not accept payment other than cash, and card use is restricted to major banks, department stores, and hotels. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.

Banking Systems

Madagascar’s financial sector has 13 commercial banks (BMOI; BNI; SGM, acquired by BRED Banque Populaire in 2024; BOA; MCB; SBM; AccèsBanque Madagascar; BGFI; Baobab Banque Madagascar; Banky First Madagasikara; SIPEM; M’Vola Bank; and AFG Banque Madagascar„a subsidiary of Atlantic Group.  Most are subsidiaries of foreign banks based in Morocco, Mauritius, France, and mainland Africa. The top four banks account for more than 80 percent of assets and deposits. A foreigner can open a bank account provided s/he has established residence or investor status.

Despite a relatively sound financial system, financial intermediation remains low, and Madagascar ranks 132 out of 190 countries in terms of access to credit in 2020. Madagascar’s banks lend only about 15.6 percent of GDP to the private sector, compared to an average of 25 percent for sub-Saharan African countries (2020 figures).  Banks favor short-term loans (52 percent of overall loans) due to perceived risk, lack of sophisticated financial products, and lack of a secondary market for offsetting risk.  Moreover, credit benefits only a limited number of sectors. Finally, of the credit extended to the private sector, 69 percent goes to private companies and 29 percent to individuals and households.

For more information on the banking system please read the section Capital Markets and Portfolio Investment of the Investment Climate Statement.

Foreign Exchange Controls

Overseas earnings must be declared and then repatriated to Madagascar. In 2020, the GOM cracked down on delays in repatriation of overseas foreign earnings in the wake of COVID-19 trade disruptions.  Madagascar abides by the IMF’s Article VIII statutory framework, which prohibits direct government limitation on foreign exchange use and availability, but new regulations signal a more restrictive environment.  Such regulations include limits on who is allowed to have foreign currency-denominated accounts and higher reserve requirements on deposits held in foreign currencies (24 percent on deposits held in foreign currency versus 11 percent on Ariary-denominated deposits). An interbank foreign currency market (MID) determines the exchange rate daily. There are money-changing facilities (forex bureau and bank kiosks) available at the major banks in Antananarivo and at the airport. Foreign currency can be exchanged in most main towns and cities. There are ATM machines available in the major cities. ATMs only dispense local currency.

U.S. Banks and Local Correspondent Banks

U.S. banks do not operate in Madagascar. Most of the commercial banks have U.S. correspondent bank relationships for facilitating international transactions, which are often denominated in USD.

Remittance Policies

Madagascar allows the free conversion or transfer of funds associated with foreign investment, including remittances of investment capital, earnings, loan repayments, and lease payments, so long as a mandatory declaration is filed at the relevant branch of the Ministry of Economy and Finance.