Togo boosts the implementation of the information exchanges in the framework of BIC

Finance

Thursday, 21 June 2018 18:38

Togo boosts the implementation of the information exchanges in the framework of BIC

(Togo First) - Yesterday, June 20, 2018, a workshop to sensitize and reinforce the capacity of the institutions which collect customers’ data in the framework of the credit bureau BIC was organized in the new presidential palace.

Organized by the cellule Climat des affaires (CCA) in collaboration with Créditinfo Volo, the group in charge of the operational phase of BIC in Togo, the high-level meeting was attended by heads of public utility companies such as water and electricity companies as well as financial institutions.

It was presided by Badanam Patoki, the general secretary of the presidency and Sandra Johnson, coordinator of the CCA, who was representing the ministry of finance Sani Yaya.

The context

The participants were briefed on the new provisions of the uniform act n°2016-05, adopted by Togo on March 14, 2016, regulating the BIC in the West African Economic and Monetary Union (WAEMU).

Let’s note that BIC is an institution of the BCEAO which collects data and credit profiles from public utility companies and financial institutions to establish a comprehensive solvency report on clients. This report will then be used as objective criteria for credit decisions.

Such reports will help improve financial institutions’ loan portfolio by reducing the volume of defaulted loans and improve the credit costs. It will also help improve the utility companies’ financial health and establish a climate of trust in the economy.

Even though the creation of such institution is a pragmatic answer to the challenge credit access presents in the WAEMU, and in Togo in particular, data collection is lagging.

Indeed, since it was adopted, only 11 out of the 13 banks and 3 out of the 6 decentralized financial institutions chosen for this programme really provide their data.

According to BIC, by April 11, 2018, Togo effectively provided the data of 1% of the loans and borrowers declared to the programme (54,073 loans out of a total of 4,237,800 and 19,417 borrowers out of a total of 2,011,019). In comparison, only Benin and Guinea-Bissau did worse.

Compared to the programme’s expectations which is to introduce at least 5% of the adult population in its database by the end of 2018, this performance is rather low. It also wants to improve the credit access indicator for which Togo is ranked 142nd out of 181 countries; far from the Doing Business standard.

Measures to accelerate the process

To accelerate the programme, the government decided to modify the law governing the BIC during the ministers' council on May 08, 2018. This modification was to allow financial institutions to share the data they had before the BIC was adopted by Togo. In addition, because of the urgency to integrate utility companies to the database, the country issued a decree authorizing CEET, TdE, Moov and TogoCom (which to some extent provide short and middle term credit to their clients) to prepare their credit-related data for their integration to BIC’s database.

In that regard, the different participants were able to acquaint themselves with the uniform act and the decree for a better participation in the information exchange platform (presented during the workshop) thanks to the workshop organized yesterday in collaboration with CreditInfo Volo.

For Sandra Johnson, “this workshop was organized at the turning point of the structural transformation process supported by the new national development plan (Plan national de développement-PND) in Togo”, which is greatly concentrated on the private sector.

She then asked the participants to commit to the improvement of the business environment on whose results credit access depend. “ In these times when the government has decided to grant an important place to the private sector, I invite you to be the pioneers of this reform which will be reviewed weekly according to the instructions received and for which we are asked to make it a successful initiative”, she added.

Fiacre E. Kakpo

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