In Togo, Microfinance Deposits Rise as Credit Access Shrinks in Q1 2025

Finance

Wednesday, 27 August 2025 06:40

In Togo, Microfinance Deposits Rise as Credit Access Shrinks in Q1 2025

(Togo First) - Togo's microfinance sector showed mixed results in the first quarter of 2025. According to regional data from the Central Bank of West African States (BCEAO), deposits collected by decentralized financial systems (SFD) rose by 22.9 billion FCFA (about $37.5 million), or 5.5%, to approximately 436 billion FCFA (about $714 million).

On a year-on-year basis, the increase was nearly 9%, driven by growing confidence among households and groups in these institutions, which are capturing a rising share of national savings. The structure of deposits remains dominated by demand deposits at 57.3%, while term deposits account for 22.5%. The average amount per client was an estimated 129,898 FCFA, a 1.4% increase from the end of December, indicating that savings are growing faster than the number of clients.

However, outstanding loans granted by Togolese SFDs contracted by 20 billion FCFA (about $32.7 million), a 5.2% drop, aligning with a downward trend seen across the West African Monetary Union (WAMU). This decline was accompanied by a deterioration in the loan portfolio, with the gross non-performing loan rate approaching 10%, well above the prudential norm of 3%.

In the previous quarter, outstanding loans from microfinance institutions in Togo totaled 395.6 billion FCFA. At that time, the country had stood out with stronger growth than Senegal (+4.4%), Côte d’Ivoire (+4.8%), Burkina Faso (+3.1%), and Benin (+2.5%).

For sector players, this discrepancy is a concern. The growing appetite for savings contrasts with more restricted access to credit, even though microloans remain a vital financial tool for households and small businesses. Togo's microfinance sector includes around 70 institutions, dominated by organizations such as FUCEC.

Ayi Renaud Dossavi

REFORMS OVERVIEW

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