Paper

Performance of Microfinance Institutions in Burkina Faso

Can MFIs in Burkina Faso meet the high microfinance demand?
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This study uses indicators such as the sustainable interest rate and the subsidy dependence index to test the performance of microfinance institutions (MFIs) in Burkina Faso. The study indicates that:

  • The outreach performance of MFIs is very low compared with the potential demand;
  • The factors responsible for low performance are the refusal to mobilize local savings and the high costs of supply of microfinancial services.

The paper also points out key findings:

  • Large scale outreach to the poor remains a challenge;
  • Savings mobilization leads to better self-sustainability;
  • MFIs have a high quality loan portfolio;
  • They are not self-sustainable and are dependant on subsidies.

Finally, the paper recommends steps to improve the performance of MFIs:

  • MFIs should pay attention on savings mobilization;
  • MFIs should adopt efficient management information systems;
  • Ceiling on interest rates should be removed and MFIs should be allowed to charge competitive interest rates.

About this Publication

By Congo, Y.
Published