Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
West African Economic and Monetary Union countries
Country Indicators
Information Last Updated
March 2004
Formal and Semi-Formal Sources of Microfinance
The PARMEC Law was passed by the Central Bank of West African States (BCEAO) and creates an institutional structure for mutual societies. National Finance Ministries will directly implement the law and provide details on licensing and regulation. Other MFI structures may exist in these various countries; this table discusses only the PARMEC law as passed by the BCEAO and effective in Benin, Burkina Faso, Cote d'Ivoire, Guinea Bissau, Mali, Niger, Senegal, and Togo.
NGO microfinance provider formalization or transformation issues
The PARMEC Law did not provide any provisions for licensing or promoting any MFIs of a non-mutual structure.
Ongoing microfinance policy development status
BCEAO is planning to modify the PARMEC Law and is preparing a standard charts of accounts for microfinance institutions.
General Participation in the Financial Services Market
No. of institutions
Total Assets
Deposits
Non-bank Financial Institutions
Non-cooperative institutions (MFIs)
Unknown
Cooperatives/Credit Unions
Savings and Credit Cooperatives
410 (Lolila-Ramin 2005)
Outstanding Loans: FCFA 130 million
FCFA 170 million
General Approach to Regulating
Legal basis for regulating
Definition or description of institution
Regulator(s) and role of regulator(s)
Activity that determines required regulatory status
Non-bank Financial Institutions
Non-cooperative institutions (MFIs)
PARMEC; Convention Cadre (Framework) to Regulate Non-Mutual or Cooperative Credit and Savings Institutions. Convention Cadre has a maximum duration of five years.
Non-mutual or cooperative savings and credit institutions. (See Art. 5)
Country’s Ministry of Finance
The institution does not have a mutual or cooperative structure,, and can be a direct credit provider or a project with credit components.
Cooperatives/Credit Unions
Credit Unions
PARMEC, Decrees and Instructions Issued Pursuant to PARMEC (Unless otherwise noted, references to “articles” in this document refer to articles in the PARMEC law. A decree and “instructions” have been issued pursuant to PARMEC; references to those documents are noted in the text.)
Mutual and cooperative savings and credit institutions and their unions, federations, and confederations (See Art. 3)
The institution cannot have a profit-making goal, must be founded on the principles of union, solidarity, and mutual help, and must have savings and credit functions as its principal goal. (See Art. 2, line 1)
Central Bank of West African States (BCEAO) and Ministries of Finance review annual reports. (See Arts. 62-68) Some self-supervisory functions are also envisioned for the mutual networks of the institutions. (See Arts. 57-61 and Meagher 2002)
The mutual or cooperative structure of the institutions
Organizational Registration
Laws and regulations governing registration
Agency administering registration
Required legal form of organization
Non-bank Financial Institutions
Non-cooperative institutions (MFIs)
These institutions are permitted to operate either pursuant to the regular banking laws of the country (see Art. 6, line 1) or pursuant to a convention cadre (framework) that is signed with the country’s Ministry of Finance and is renewable by mutual consent. (See Art. 6, line 2, and Art. 7)
Country’s Ministry of Finance
Not a cooperative
Cooperatives/Credit Unions
Credit Unions
PARMEC delegates to country’s respective laws and Ministry of Finance. (See Art. 4.)
For Cote d’Ivoire: Decree No. 97-37 of Jan. 22, 1997
Country’s Ministry of Finance
Mutual or cooperative
Licensing Requirements and Standards
Standards for ownership officers
Feasibility study/business plan
Operating Manuals
Cooperatives/Credit Unions
Credit Unions
The names, addresses, professions and criminal records of directors and managers of the institution must be appended to the registration materials. (See Art. 28, line 4 of the Decree)
An assessment of human, financial, and technological resources, as well as a financial plan for the first year, must be annexed to the registration materials. (See Art. 28, lines 5 and 6 of the Decree)
Varies by country and mutualist federation (Meagher 2002)
50%: the maximum value of the outstanding loan/investment portfolio must equal two times the value of members’ savings (excluding risks covered by donor funds). (See Annex to Instruction No. 6 (Art. 50 of the Decree))
Varies by country and mutualist federation (Meagher 2002)
15% net surplus annually goes to general reserves. (See Annex to Instruction No. 6 (Art. 49 of the Decree)) Short-term assets must equal 80% of short-term liabilities. (See Annex to Instruction No. 6 (Art. 54 of the Decree))
Risk Management Guidelines
Guidelines & restrictions on financial services
Guidelines & restrictions on operational rules
Guidelines & restrictions on interest rates
Concentration of risk
Connected/insider business
Non-bank Financial Institutions
Non-cooperative institutions (MFIs)
27% interest rate cap, although some MFIs negotiate a higher rate.
Cooperatives/Credit Unions
Credit Unions
Permitted: Savings and credit, fund transfers
Prohibited: Checking (See Art. 24) Other activities are permitted with Ministry of Finance approval.
Institutions can conclude agreements with cooperative institutions or financial institutions to help its members acquire goods and services offered by those third parties if they are within the framework of the first institution’s objectives. (See Art. 28, line 1)
Institutions can create “service companies” to serve their members but the amount of money used by the company cannot exceed 5% of the loans of the institution. (See Art. 28, line 3 of PARMEC, Art. 48 of the Decree)
27% interest rate cap
No more than 10% of the deposits of an institution may be loaned to a single member. (See Annex to Instruction No. 6 (Art. 53 of the Decree))
No more than 20% of the deposits of an institution may be loaned to directors or managers of the institution. (See Annex to Instruction No. 6 (Art. 52 of the Decree))
Reporting and Supervision
Supervision Method
Supervision costs and fees
Disclosure and reporting requirements
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
Other periodic reports must be submitted to the Finance Ministry and Central Bank according to the country’s laws. (See Art. 4 of Convention-cadre)
Annual reports must include the amount of collected savings, loans, the number and amount of at-risk loans, the interest rates applied, and commissions charged. (See Art. 4 of Convention-cadre)
Cooperatives/Credit Unions
Credit Unions
Institutions must submit annual reports to the Ministry of Finance, the BCEAO, and the West African Banking Commission, who can all initiate intervention. (See Arts. 62-68)
Some supervisory functions are also envisioned for the mutual networks of the institutions, whereby supervision and control responsibilities are placed in the following hierarchy: network-confederation-federation-union-credit union. Each higher level has internal supervision and control requirements over the lower level, conducts audits, and represents the lower-order entities at the next higher level. (See Arts. 57-61 and Meagher 2002)
Depends on country or mutual federation (Meagher 2002)
Annual reports must include (among other factors):
• The number of members of the institution (including the number of men and women)
• the amount of general reserves; the amount of deposits
• the interest rates those deposits pay
• the cumulative amount of loans paid out
• the estimated average length of a loan
• the “rate of penetration,” which is the proportion of the targeted population in a community reached by the institution’s activities
• the amount of at-risk loans
(See Annex to Instruction No. 7)
Depends on country or mutualist federation (Meagher 2002)
Tax Treatment
Taxes on Income
MFI-specific
MFI-specific
Qualifying credit institutions are tax exempt. (See Art. 30)
Members also do not pay taxes on interest payments that they receive. (See Art. 31)
