Lending and borrowing between relatives in Burkina Faso
In Burkina Faso, lending between individuals is very common among relatives, colleagues and tontine members; it is legal, but subject to the UMOA usury rate, and is best backed by a signed and certified acknowledgement of debt.
A practice rooted in Burkinabè social life
Lending to a brother, a neighbour in the shared courtyard or a workplace colleague is part of everyday solidarity in Ouagadougou as well as in the villages. These loans are often made without anything in writing, which leaves the lender exposed if a disagreement arises.
Tontines and savings associations
Neighbourhood, market and workplace tontines bring together members who contribute at fixed intervals and take the pot in turn. Some also lend the common fund to a member, at an interest rate set by the group itself.
The usury rate also applies to private lenders
UMOA usury rules cover all lenders, including non-bank economic agents. A private individual who demands more than 24% a year, or huge monthly interest, faces the criminal penalties set out in the law against usurious lending.
The acknowledgement of debt and its certification
A dated document stating the amount in figures and words, the repayment schedule and the full identity of both parties is the best evidence. Having the signatures certified at the town hall strengthens the document if the debt is ever disputed.
Witnesses and guarantors in tradition
It is common to lend in front of an elder or a respected witness, who acts as a mediator. This social mechanism does not remove the need for a written document, which remains essential if the matter ever has to go to court.
Debt recovery: the OHADA order for payment
If the borrower does not pay, a creditor holding a written document can start the order-for-payment procedure under the OHADA Uniform Act on debt recovery. The competent high court issues an order, which a bailiff then serves on the debtor.
Mobile money transfers as a written record
A transfer through Orange Money or Moov Money leaves a dated history that helps prove the funds were handed over. That record does not prove the terms of the loan, however, so it should be supplemented with a signed agreement between the parties.
When to use a caisse populaire rather than a relative
For larger amounts or recurring needs, microcredit from a caisse populaire avoids putting a family relationship at risk. The borrower also builds up a repayment history that will be useful when applying for future financing.
Diaspora members lending from abroad
Burkinabè living in Côte d'Ivoire or Europe often lend money to family for a business or building project. Putting the agreement in writing and sending funds by traceable transfer helps avoid conflicts when they return home.
Online platforms and fake lenders
Pages promising quick loans between individuals on Facebook or TikTok are very often scams. A genuine offer never asks for fees by mobile money before the money is paid out, as the case of neighbouring Niger also shows.
Comparing with a conventional bank loan
When the borrower is an employee, a bank personal loan may cost less than a private loan at a high rate. Borrowing from relatives keeps the advantage of flexibility and the absence of any arrangement fees.
Tax treatment of interest received
Interest received on a private loan is in principle income. For modest sums between relatives it is rarely declared, but a regular lender who turns it into an activity should consider their obligations towards the Direction générale des impôts.
Setting up a loan between relatives in Burkina Faso
- Agree together on the amount, term, instalments and any interest, keeping it below the ceiling of 24% a year.
- Draft an acknowledgement of debt with the names, CNIB numbers and addresses of both parties.
- Have the signatures certified at the district town hall and keep one original copy each.
- Pay the funds by bank transfer or mobile money so that you keep dated proof of handover.
- Record every repayment received, with a signed receipt or the Orange Money or Moov Money transaction reference.
Costs and limits of a private loan
| Item | Rule or practice | Benchmark |
|---|---|---|
| Maximum interest | Usury rate for non-bank lenders | 24% a year, indicative |
| Signature certification | District town hall | Current municipal fee |
| Mobile money transfer fees | Amount sent and operator | Per Orange Money or Moov Money price list |
| Order-for-payment procedure | Court registry and bailiff fees | Varies with the amount claimed |
What the file for a private loan should contain
- Copy of both parties' CNIB
- Dated and signed acknowledgement of debt
- Repayment schedule
- Proof of payment by bank or mobile money
- Receipts for each repayment
Situations to avoid between lender and borrower
- Lending a large sum with nothing in writing, relying on a spoken promise, and then being unable to prove anything in court.
- Demanding very high monthly interest, a practice treated as usury and liable to criminal prosecution throughout the UMOA area.
- Sending file fees to a stranger who presents themselves online as a generous private individual lending from Europe.
- Handing an original titre foncier to a private lender as security without a notarised deed, at the risk of never getting it back.
Lenders to contact
- Coris Bank International Burkina Faso: Burkinabe subsidiary of the Coris banking group, a commercial bank offering accounts, banking services and financing to individuals and businesses.
- UBA Burkina Faso: Burkina Faso subsidiary of the pan-African United Bank for Africa group, a commercial bank providing accounts, banking services and financing to individuals and companies.
Burkinabè peer-to-peer lending: practical answers
Is a loan between individuals legal in Burkina Faso?
Yes, lending your own money occasionally is legal. Only the regular business of lending to the public is reserved for licensed institutions, and the agreed rate must respect the usury ceiling set at UMOA level for all lenders.
Do you have to go to a notary for a family loan?
No, a private acknowledgement of debt is enough for most family loans. A notary becomes useful when the amount is large or when a property guarantee is planned as part of the arrangement between the two parties.
What can you do if the borrower does not repay?
It is best to try family or customary mediation first, then send a formal written demand. Failing that, the OHADA order-for-payment procedure makes it possible to obtain an enforceable title from the court.
Is a WhatsApp screenshot enough as proof?
It may count as initial evidence but remains weak. A signed document, backed by the mobile money or bank transfer history, gives you a much stronger position before a judge if the dispute ever reaches court.