Togo pushes reforms to improve microfinance loan recovery

Finance

Monday, 30 March 2026 14:27

Togo pushes reforms to improve microfinance loan recovery

(Togo First) - Officials and industry stakeholders met in Lomé last week to discuss improving debt recovery at microfinance institutions. The workshop was organized by the Ministry of Finance and Budget with the Professional Association of Decentralized Financial Systems (APSFD).

The meeting follows a deterioration in portfolio quality across the sector. According to ministry data, the portfolio at risk reached 6.7% in 2025, more than double the 3% regulatory threshold.

Participants examined challenges in debt collection and proposed measures to strengthen existing mechanisms while identifying new approaches.

A significant share of loans issued by microfinance institutions are not repaid on time, exposing them to losses. This also has wider economic consequences, including reduced access to credit for vulnerable populations, higher borrowing costs and potential strain on the financial system.

The government, which views microfinance as a key driver of financial inclusion, says addressing the issue is now a priority. The sector has grown significantly, with nearly 4.7 million members and an outstanding loan portfolio estimated at 352 billion CFA francs.

“Non-repayment of loans erodes equity, undermines the viability of institutions and limits their ability to finance new borrowers. It also affects the confidence of depositors and financial partners, putting the entire microfinance system at risk,” Finance and Budget Minister Georges Barcola said.

The government added it will support efforts to build a healthier, more inclusive and more resilient sector. Measures are being rolled out to help institutions comply with a new microfinance law recently adopted in Togo.

Esaïe Edoh

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.