Paper
Developments of Microfinance in West Africa and Trends for the Decade
Does Africa remain the forgotten continent?
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7 pages
This paper briefly describes the development of the microfinance sector in Africa. It identifies the main characteristics and prominent features of the recent developments as:
- Types of microfinance organizations which include:
- Savings and credit institutions,
- Micro credit organizations inspired by the Grameen Bank,
- Organizations and projects with credit component.
- Phenomenon of rapid growth which can be contributed to:
- A dominant situation on the microfinance market, such as FECECAM in Benin, which services 56% of the clientele and where the banking sector is totally absent,
- High competition between microfinance institutions (MFIs).
- New promoters and new generation of MFIs which include:
- Commercial banks,
- Promoters from business class forming credit unions,
- Unemployed urban youth interested in setting up a profitable microfinance business.
- Integration in the financial sector with more MFIs establishing financial relations with banks.
Finally the paper suggests some of the trends for the next decade which may highlight:
- Split in the large federation to form more autonomous regional institutions;
- Increased co-operation from the banking sector as more commercial banks enter the microfinance market;
- MFIs expanding into the urban markets to cater to the small and medium enterprise market due to its profitability.
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