Private companies, Individuals, State...who were the banks’ favorite customers in 2020?

Banking

Monday, 25 October 2021 13:31

Private companies, Individuals, State...who were the banks’ favorite customers in 2020?

(Togo First) - The 13 banks active in Togo seem to be coping well against the Covid-19 pandemic which has spurred uncertainty in the country’s banking industry - an industry that was already facing many challenges.

Last year, these intermediaries lent a little over CFA615 billion to economic actors, pushing outstanding debt around CFA1,428, or somewhere above. This amount is 7% less than the amount loaned in 2019 - CFA62 billion. Also, the amount supplied in 2020 is the lowest since 2016, according to BCEAO data compiled by Togo First.

Who do banks lend to?

In 2020, banks in Togo loaned mostly to companies in the production sector. Indeed these companies secured over 61% of bank loans disbursed that year; up about 3% compared to 2019 where they grabbed 55% of all loans the lenders gave out.

After private companies, individuals were the ones most backed by banks that operate in the country. They received CFA125 billion - 20% of the total portfolio - from the lenders in 2020. The sum is 6% down compared to 2019.

Meanwhile, banks were more reluctant than usual to lend to individual entrepreneurs. Last year, bank loans to these actors plummeted by 30% compared to the year before. Regardless, this segment remains in a tie with the State and its arms (public companies included).

However, the data available reflects an increase of loans to the government in 2020, even though banks tightened their lending terms.

An in-depth analysis

46% of the new loans provided by banks in 2020 - CFA285 billion - served to support the cash flow of businesses as they were struggling amidst the pandemic.

Regarding lending to back exports, while still very low, they bounced from CFA1.3 billion in 2019 to CFA1.6 billion in 2020; though borders were closed. The increase contrasts with 2018’s dip (CFA100 million). As for consumer loans, in 2020 they stood at CFA114 billion which is more than 18% of the total sum loaned by banks over the period.

Fiacre E. Kakpo

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.