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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