Benin introduces new committee to clean up microfinance sector
The microfinance sector in Benin has significantly grown over the last few years.The microfinance sector in Benin has significantly grown over the last few years.
Its government has introduced several initiatives to boost the sector, including a microcredit scheme for the poorest communities called MCPP.
Created in 2006, it includes financial training for professionals and clients, as well as preferential rates on loans for the poorer population.
According to Microfinance Minister Reckya Madougou, 857,000 people have benefited from microfinance since 2006.
Among them, 82 percent have accessed credit for the first time thanks to the MCPP, L'Autre Quotidien newspaper reports.
However, the sector is affected by several problems, including a strong and unfair competition between microfinance institutions, a lack of professionalism and the emergence of unauthorised structures, LaMicrofinance.org reports.
This is why the CSFASM committee, the objective of which is to clean up the microfinance sector, has been introduced in Benin.
The committee is in charge "of coordinating the permanent monitoring of the whole financial sector including the informal sector, creating a secure frame for the management and information exchange between monitoring institutions and finally gradually closing all unauthorised institutions" explained President of the organisation Servais Adjovi, quoted by Xinhua news agency.
He added that in 2011, among 1,021 microfinance points of service, 795 have operated out of the legislation.
"Around 6.1 billion CFAF (€9.3 million) of debts are outstanding in this sector," Mr Adjovi said.