Self-financing dominates business creation in Togo, World Bank says

Economic governance

Thursday, 09 April 2026 16:17

Self-financing dominates business creation in Togo, World Bank says

(Togo First) - Entrepreneurs in Togo overwhelmingly finance the start of their businesses using their own funds, according to the World Bank’s Africa Economic Update 2026.

The report shows that 94% of entrepreneurs rely on personal resources or support from family and close contacts. Of these, 73% use their own savings to launch their activities, while 21% depend on family or relatives.

Formal financing remains limited. Only 5% of entrepreneurs access funding from banks, microfinance institutions, public programs or other formal credit facilities. Informal sources account for 1%, while other sources are negligible.

This pattern reflects persistent barriers to credit access. The World Bank notes that most self-employed workers rely primarily on personal savings or support from family and friends to finance their startup capital.

High borrowing costs and collateral requirements that are poorly suited to small businesses remain key constraints.

Similar trends across the sub-region

Togo reflects a broader regional pattern. In Senegal, 74% of entrepreneurs rely on their own resources, compared with 76% in Guinea-Bissau and 79% in Nigeria. The figures stand at 79% in Benin, 81% in Côte d’Ivoire and 85% in Mali.

Across these countries, family support remains the second main source of funding, while formal channels are still underused. The data points to an economic structure dominated by informal enterprises. The report notes that non-agricultural employment is largely driven by informal family businesses serving local markets.

This structure limits integration into formal value chains and restricts access to structured financing.

Recent efforts

The World Bank data covers 2021 and may not reflect more recent developments. Togo has since stepped up efforts to expand financial inclusion. The inclusion rate reached 89.04% in 2024, up from 87.7% a year earlier, placing the country among the most advanced in the WAEMU.

This progress is partly driven by the National Fund for Inclusive Finance (FNFI), which said it had granted more than 1.9 million loans worth a total of about 116 to 117 billion CFA francs by end-2025.

Authorities are also promoting microfinance, mobile money and digital services to broaden access to financial services, particularly in rural areas. Other mechanisms, including the ANPGF and the MIFA, aim to reduce lending risks and support SME financing.

Ayi Renaud Dossavi

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

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In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

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GETTING ELECTRICITY (more info)

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REGISTERING A PROPERTY (more info)

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PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

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