Togo: Loans to MSMEs on the rise but still not enough

Finance

Friday, 07 October 2022 13:05

Togo: Loans to MSMEs on the rise but still not enough

(Togo First) - In the first half of this year, loans to micro, small, and medium enterprises (MSMEs) rose, YoY. Sani Yaya, Togo’s minister of finance, revealed the improvement on October 6, 2022, during a review of the bank and finance sector. The review took place during a meeting held by the National Credit Council (CNC).

“Over the first six months of 2022, the amounts of new loans to micro, small and medium-sized enterprises reached CFA75 billion, CFA11 billion, and CFA41 billion [respectively],” Yaya said.

Besides finding that bigger businesses are the ones that have more loans, the review noted that the sums loaned to MSMEs in H1 2022 were up by 38%, 82%, and 149% compared to H1 2021.

Insufficient support

According to Sani Yaya, despite having improved, credits to businesses are still lower than what the State and entrepreneurs expect of banks and financial institutions.

For example, loans to micro, small and medium enterprises only constitute 25% of the total loaned in H1 2022 (CFA489 billion or 19% compared to H1 2021 according to the same source).

A new agency to support SMEs

To change this trend, the government announced a few weeks ago the launch of the national agency for the development of MSMEs–an agency which was set up by decree on July 4, 2022.

The government affirmed that the new agency will centralize and steer all efforts to support SMEs, in a coherent and structured manner.

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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.