Banks and MFIs to form a partnership in Senegal
The decision makers in the banking and decentralised financial systems (DFS) sectors gathered last week in Dakar to discuss the introduction of a partnership to improve access to finance in Senegal.The decision makers in the banking and decentralised financial systems (DFS) sectors gathered last week in Dakar to discuss the introduction of a partnership to improve access to finance in Senegal.
Banks and microfinance institutions (MFIs) are each facing specific difficulties when it comes to answering the country's finance needs.
MFIs have the advantage of being located in peri-urban and rural areas, benefiting from a dense network that facilitates the redistribution of money. However, they often lack financial resources adapted to the needs of rural populations.
On the other side, banks often have an abundance of liquidities but require many guarantees and generally do not have a decentralised branch network, according to the report on rural and agricultural finance made by the CIRAD and the Agricultural University of Montpellier, published by the microfinance.org portal.
The president of the Bankers and Financial Institutions' Association Arfang Daffé told Wal Fadjri newspaper that the benefits of a partnership between banks and DFS are multiple: banks will get new loans and will improve outstanding loans collection and MFIs will get access to banks' financial resources and will be able to widen their service offering.
Experts have mentioned during the workshop the need for changes in the regulation to define DFS and banks' role, the difficulties for MFIs to access bank financing and the outlook for this partnership between banks and MFIs.