Togo: Government works on boosting access to loans while mitigating related risks

Economic governance

Thursday, 10 May 2018 17:02

Togo: Government works on boosting access to loans while mitigating related risks

(Togo First) - To mitigate loan risk, Togo’s government has just amended the law n°2016-005 of March 14, 2016, for the regulation of credit information bureaus (CIBs) within the West African Monetary Union (WAEMU).

In a council of ministers last Tuesday, the newly amended bill aims to obtain information on loan takers to assess their credibility, provided the client gives their approval. However, article 53 of this law indicates that “obligation to have client’s approval does not apply to those that took a loan before the law was enacted”.

Effective adoption of this law “will allow banks, microfinance institutions, decentralized financial systems (DFS) and any other financial institutions involved in sharing of information on loans or client history, to better assess loan risk, and subsequently lower loan cost”.

Moreover, the bill would help improve business climate in Togo and its rating by global entities such as Doing Business and MCC.

Commenting on the decision, Sandra Ablamba Johnson, Advisor of the President and coordinator of the Business Climate Cell, said: In WAEMU, “only Côte d’Ivoire reached a 4% quota in 2017 implementing similar measures, according to the Doing Business report. By replicating the experience, we will increase our database allowing banks and financial institutions to provide loans at reasonable rates especially with the implementation of our New Development Plan which will have Togolese private sector as the main actor. One of the major projects falling under this plan is the agricultural transformation project in line with TIRSAL”.

Séna Akoda

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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)

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

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)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

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)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.