Islamic Republic of Mauritania: Selected Issues

The paper explores the financial development landscape in Mauritania, highlighting its bank-centric structure and limited financial market development. Despite a large number of banks, financial intermediation remains weak, with low private-sector credit to GDP, limited financial inclusion, and persistently high non-performing loan ratios. Structural challenges, including governance issues, connected lending practices, and insufficient financial infrastructure, exacerbate these inefficiencies. The paper introduces the Efficiency-Access and Depth Gap (EADG) metric, revealing a significant imbalance between profitability and financial intermediation/inclusion efforts among Mauritanian banks. Policy recommendations focus on consolidating the banking sector, enhancing regulatory frameworks, and fostering mobile banking and financial inclusion strategies to address these challenges. The findings underline the critical need for robust institutional reforms and stronger capital bases to support economic growth and improve financial intermediation in Mauritania.