Togo: Microfinance institutions slow down on lending as overdue loans spike amid Covid-19 pandemic
Tuesday, 09 February 2021 14:24 
(Togo First) - Amid the Covid-19 pandemic, microfinance institutions active in Togo considerably lowered loans to the public in the nine first months of 2020. Indeed, after recording two-digit growth in the years before, unpaid loans from these entities had grown by 0.7% only at the end of September 2020, data from the central bank of West African States (Banque centrale des Etats de l’Afrique de l'Ouest - BCEAO) shows.
Meanwhile, overdue loans have risen across the WAEMU over the period under review. Indeed, the gross deterioration rate of the credit portfolio of microfinance institutions operating in the region grew from 7.6% to 9.1% between Sept. 2019 and Sept. 2020. This is far above the 3% norm set in the sector.
The situation caused decentralized finance systems to be more cautious with the loans they grant.
Deposits are on the rise
Regardless, in Togo, deposits kept increasing over the period. Year-on-year they grew by CFA20.3 billion or 8.7% over the period covered.
The country, with its population of 7.8 million people, recorded the fourth-best performance in this segment in the WAEMU. It was behind Côte d'Ivoire (+44.6 billion or 13.4% y/y), Burkina Faso (39 billion or +15.3%), and Benin (31.9 billion or +26.8%).
After Togo came Senegal (+17.32 billion, +4.5%), Mali (+15.26 billion, +14.2%), Niger (+490 million, +1.9%), and Guinea Bissau where deposits slumped by CFA2.4 million (-2.5%).
According to BCEAO, the overall upward trend was “favorable to financial inclusion, in a context where restrictions imposed due to the health crisis were gradually being lifted”. Across the whole Union, deposits made soared by CFA169 billion, from 1,454 billion to 1,623 billion (+11.6%), year-on-year.
Ayi Renaud Dossavi
