Originally published: April 11, 2008
Source: ACCION International
ACCION International has noted with great concern and disappointment the recent events at PADME, an ACCION partner and leading MFI in Cotonou, Benin. In early March 2008, the Benin government, citing operational concerns with the MFI, requested the resignation of PADME’s board and management team. The board and management in turn initiated legal action to prevent the government takeover, and PADME’s staff subsequently undertook supportive industrial action. Since then, an interim director has been appointed, and the staff has returned to work. The prospects for PADME and the future of microfinance in Benin, however, remain unclear.
ACCION has provided technical assistance to PADME, since 2001, to help the MFI manage its transition from a private association to a share-capital, non-bank financial institution. The circumstances at PADME underscore the delicacy and demands of establishing sustainable microfinance in developing countries, where philosophies and approaches can vary significantly.
As a result of the government’s intervention, however, PADME’s potential investors concluded that further participation has become impossible. They recently and regrettably informed former managing director René Azokli that they have suspended consideration of their proposed investments. In the meantime, ACCION continues to coordinate with investors, partners and other institutions and practitioners engaged with both PADME and the Benin government in order to more fully understand the situation and to offer appropriate assistance for a timely and effective resolution aimed at aiding Benin’s working poor.
Read the complete article: Microfinance Struggles in Benin (ACCION International)
To learn more about the microfinance situation in Benin, read the Microfinance Gateway Highlight:
Microcredit for the Poorest and Market Distortions in Benin (26 Jun 2007)