WAEMU: IFC recommends introduction of CRAs to improve access to credit

May 17, 2012

The General Secretary of the Senegalese Finance Ministry Oumar Sylla has announced the establishment of a work group to discuss the introduction of a legal frame to support the development of credit reference agencies in countries of the West African Economic and Monetary Union.

The General Secretary of the Senegalese Finance Ministry Oumar Sylla has announced the establishment of a work group to discuss the introduction of a legal frame to support the development of credit reference agencies (CRA) in countries of the West African Economic and Monetary Union (WAEMU).

It hopes to contribute to the development of the financial system in the region, where only 7.3 percent of adults have access to credit, according to Mamadou Camara, Director of the BCEAO Senegal, quoted by APS news agency.

The benefits of this tool were highlighted during a regional conference organised on May 3rd in Dakar by the International Finance Corporation, Le Soleil newspaper reports, adding that experts believe CRAs can significantly develop credit activity by improving traditional risk assessment methods.

CRAs allow the collection of data on borrowers, making it available to lenders to help them in their decisions.

"There is a deficit of information between lenders and borrowers in order to make a correct risk assessment (…) banks demand guarantees and small entrepreneurs do not have these," said Jérôme Crytini, IFC official, quoted by APS news agency.

The WAEMU will also launch a new €10.2 million plan of action in June 2012 to promote access to credit for small to medium-sized enterprises (SMEs), Burkinapmepmi.com reports.

It is based around three axis. These are to create an incentive environment for SMEs, guaranty an efficient direct support for SMEs and provide them with a finance offering tailored for their needs.ADNFCR-2976-ID-801365020-ADNFCR