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SECTORAL PROFILE

SECTORAL PROFILE. Finance,Insurance, Real Estate and Business Services. CONTENTS. Background. Evolution of the Sector. Implications. Definition of the Sector. Type & Level of Activity. Financial Intermediation. Insurance. Real Estate.

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SECTORAL PROFILE

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  1. SECTORAL PROFILE Finance,Insurance, Real Estate and Business Services

  2. CONTENTS • Background. • Evolution of the Sector. • Implications. • Definition of the Sector. • Type & Level of Activity. • Financial Intermediation. • Insurance. • Real Estate. • Business Services . . . .

  3. CONTENTS • Main Services Offered • Main Operators • Economic Indicators • GDP at current factor cost • Contribution to GDP(%) • Sectoral Growth Rate(%) • Employment Trend • Earnings in the sector • Regulation of the Sector

  4. BACKGROUND... • The financial sector witnessed rapid growth for the past few years and has become the fourth pillar of our economy • Mauritius is slowly emerging as reputable financial Centre in the south west of the Indian ocean

  5. BACKGROUND... • Its potential is growing further, especially with the strengthening of the Freeport operations • Rapid development is expected in the future due to deregulation, liberalisation and the forthcoming financial services bill & financial service authority

  6. EVOLUTION OF THE SECTOR • Since mid 80's, The financial activities have experienced a gradual shift away from the dominance of banks and insurance companies.   A number of non-bank financial institutions have emerged to play a vital role

  7. EVOLUTION OF THE SECTOR • Second half of the 80’s, A broad-based liberalization of the economy took place.   The Stock Exchange was set up in 1989.  The Banking Act was revised in 1988. Legislation for the authorisation of non-bank offshore companiesinitiated.

  8. EVOLUTION OF THE SECTOR • Between 1990 & 2000, Economic diversification programme was developed to make the Financial services fourth pillar of the economy The MOBA Act was enacted in 1992 and the Freeport was established in the same year

  9. IMPLICATION... “This sector represents a major absorption capacity for employment In the future” “Employment opportunities will continue to increase in this sector”

  10. DEFINITION OF SECTOR Summary of activities. This group covers activities of financial institutions, insurance companies, real estate agencies and bodies providing business services.

  11. TYPE AND LEVEL OF ACTIVITY • Financial intermediation • Insurance • Real estate • Business services

  12. 1.Financial intermediation It comprises of: • Central bank, • Offshore banking, • Financial leasing, • Other financial, monetary and credit granting life & general.

  13. 2.Insurance It comprises of : • Life insurance companies, • General insurance companies and • Pension funding

  14. 3.Real Estate It comprises of. • Actual and imputed rent of owner occupied dwellings, • Activities of agencies involved in sale of property.

  15. 4.Business Services This group covers activities of a few large business enterprises such as: • Engineering firms, • Advertising agencies, • Computer firms, • Accounting firms, • Own account professional workers such as lawyers, accountant, notaries, surveyors etc.

  16. Financial services Payment services, Credit services, Asset accumulation and protection, Real estate, Corporate finance, Risk management and Financial data processing Financial institutions: banks & insurance Asset accumulation, Participation in issues of securities Settlement and clearing services Provision and transfer of financial information, Custodial services, Financial data processing MAIN SERVICES OFFERED

  17. Financial Operators Banks Insurance Companies, Stockbrokers, Insurance brokers, Investment companies, Venture capital Co, Fund Managers, Foreign exchange dealers, Money-changers, Leasing companies, Credit institutions and Bond dealers Main Operators MCB and the SBM dominate the sector SICOM, the Anglo-Mauritius and BAI, accounted for about 73 per cent of total sector assets for insurance Stockbroking sector, three companies, namely General Brokerage, MCB Stockbrokers and SBM ABN Amro Leasing industry is also very concentrated, with three players, namely Finlease, Mauritius Leasing and SBM Lease MAIN OPERATORS

  18. Economic IndicatorsGDP at Current factor cost (1994 - 1999)(Rs million)`

  19. GDP at Current factor cost (1994 - 1999) (Rs million)

  20. 1994 1995 1996 1997 1998 Financing, insurance, real estate and business services 15.7 16.2 16.1 16.2 16.3 Ownership of dwellings 5.6 5.4 5.2 5.1 4.9 Financial institutions 5.6 5.8 5.8 5.9 6.0 Insurance and other business services 4.5 5.0 5.1 5.2 5.4 Contribution To GDP(%)

  21. Contribution to GDP(%) • This demonstrates that this sector’s share in terms of GDP averaged 16 % during the last 5 years.

  22. Sectoral Growth Rate(%)

  23. Sectoral Growth Rate(%) • The sector experienced a growth rate of around 6-7 % annually,during the last 5 years.

  24. Employment

  25. Employment Trend • Between 96 and 99, employment in the financial and other business services sector grew at a compound rate of 5.8 per cent a year, compared to 2.2 per cent for the whole economy • In absolute terms, employment in the sector went up from 14,800 to 17,000 over the same period

  26. Employment Trend • A rising absorption capacity of Employment in the sector though… • Employment creation in banks, insurance companies and other financial institutions has stagnated

  27. Average Monthly Earnings

  28. Average Monthly Earnings • In absolute terms, average monthly earnings have increased from Rs 7,242 in 1994 to Rs 9602 in 1997 • It is estimated around Rs12,300 in 1999

  29. Average Monthly Earnings • An indication that this is one of the sector where average monthly earnings is highest in Mauritius • Employment in the financial and business services sector is highly remunerative

  30. Financial Services Supervised and regulated under a legal framework under the responsibility of the Ministry of Finance Banking Sector Regulator: Bank of Mauritius Insurance Regulator: Controller of Insurance Regulation of the Financial Services Industry

  31. Stock Exchange Regulator: Stock Exchange Commission. Operator: the Stock Exchange of Mauritius Ltd. Non-bank offshore Regulator: Mauritius Offshore Business Activities Authority (MOBAA) Regulation of the Financial Services Industry

  32. References • National Accounts,Central Statistical Office. • Ministry of Finance(Web Site). • Employment Service, Ministry of Training, Skills Development & Productivity.

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