Togo: Microfinance sub-sector recorded an increase by 10.1% for deposits and 10% for loans

Finance

Monday, 30 July 2018 17:35

Togo: Microfinance sub-sector recorded an increase by 10.1% for deposits and 10% for loans

(Togo First) - The Central Bank of West African States (BCEAO) just reviewed microfinance activities in the WAEMU region last March 31. The document shows that the Togolese microcredit is doing well with an improvement in financial inclusion and a regional upturn. According to the report, deposits collected by decentralized financial systems (DFS) amounted to CFA1, 248.7 billion at the end of March, compared with CFA1, 166.6 billion a year earlier, thus an increase by 7%.

The good result was driven by a strong performance in all WAEMU countries except Benin. Resources mobilized by microfinance structures improved significantly in Guinea-Bissau (+45.4%), Côte d'Ivoire (+13.1%), Togo (+10.1%), Niger (+9.5%), Burkina (+7.2%), Mali (+5.6%) and Senegal (+5.2%). On the contrary, Benin recorded a decline by -5.6%. The average amount of deposits per member at the end of March 2018 was CFA83,858 against CFA88,686 at the end of March 2017. This decrease could be attributed to a 13.2% improvement in people's access to financial services offered by microfinance institutions.

The number of the service beneficiaries increased from 13,154,639 a year earlier to 14,890,244 at the end of March 2018. According to a BCEAO graph, outstanding deposits for Togo are around CFA200 billion, almost twice the volume of Benin (which falls to less than CFA100 billion) and more than three times Mali's. From this perspective, Togo which is the second worst country in terms of GDP, is ranked 4th behind Senegal (over CFA300 billion), Côte d'Ivoire (over CFA250 billion) and Burkina Faso (just under CFA250 billion).

With regards to outstanding loans granted by decentralized financial systems (DFS), the portfolio grew by 15.3% at the end of March 2017, to CFA1, 263.2 billion. This growth was driven by Guinea-Bissau (+64.9%), Côte d'Ivoire (+31.8%), Burkina Faso (+16.5%), Benin (+14.5%), Mali (+13.5%), Togo (+10.0%) and Senegal (+9.4%). However, a decrease was recorded in Niger (-2.4%). The average outstanding amount of financing per member increased to CFA84,835 at the end of March 2018 from CFA83,263 a year earlier.

According to the evolution of the outstanding loans per country, Togo would rank 4th in the face of Benin. However the volume of loans granted, the repayment of which is in progress, has slightly decreased to close to CFA150 billion compared to December 2017. Although “an analysis of DFS intermediation indicators in WAEMU reveals a relatively favorable evolution for financial inclusion”, it does not hide the portfolio’s deterioration, which rose to 8.1% against 5.6% at the end of March 2017, for a generally accepted standard of 3% in the sector. Let’s recall that in Togo, microfinance is a highly strategic part of the financial sector as a whole as it significantly contributes to financial inclusion.

Fiacre E. Kakpo

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REFORMS OVERVIEW

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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 .

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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)

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