Ivorian microfinance institutions and their small loans
Ivorian microcredit is granted by licensed decentralised financial systems such as Advans, Baobab, Cofina and savings cooperatives to traders, artisans and farmers often shut out of banks, with a total cost capped at 24% a year.
The microfinance sector in Côte d’Ivoire
The country has dozens of decentralised financial systems, from neighbourhood mutuals to public limited companies with international shareholders. They operate in the working-class districts of Abidjan, such as Abobo, Yopougon and Koumassi, and in inland towns.
Who licenses and supervises Ivorian microfinance institutions
Microfinance institutions are licensed by the Ministry of Economy and Finance after an opinion from the BCEAO. The largest are also supervised by the BCEAO and the WAMU Banking Commission, given the volume of their deposits or loans.
Advans, Baobab, Cofina, Crédit Access: the private players
These institutions offer individual loans to micro-entrepreneurs, assessed on the actual cash flow of the business. Loan officers visit the shop or workshop, check stock and estimate the weekly or monthly repayment capacity.
Savings and credit cooperatives and UNACOOPEC-CI
The long-established UNACOOPEC-CI cooperative network has been through a period of restructuring. Mutuals generally require membership and prior savings, whose amount determines the size of the loan later granted to the member.
Group loans and joint guarantees
For women traders in the markets, group lending remains widespread: each member guarantees the repayment of the others. This method replaces a mortgage and suits food sellers in Adjamé or Bouaké who have no property title.
Amounts, terms and repayment frequency
First loans are often for a few hundred thousand FCFA, over six to twelve months, with weekly or monthly repayments. A record without arrears gradually unlocks larger amounts in the following loan cycles.
The 24% ceiling and the real cost of microcredit
The usury rate for decentralised financial systems is 24% a year, including arrangement fees and commissions. Because amounts are small and visits frequent, the cost is generally higher than a bank loan capped at 14%.
FAFCI and other public support schemes for women
The Fonds d’appui aux femmes de Côte d’Ivoire finances income-generating activities through partner institutions. Beneficiaries, often organised in groups, repay so that other women in the region can be financed in turn.
Farm microcredit in the producing areas
Some institutions finance food crop, cocoa or cashew growers, often through cooperatives in Soubré, Daloa or Korhogo. The specific features of these seasonal loans are set out in the guide to farm loans in Côte d’Ivoire.
From microcredit to SME finance
When the business grows and registers with the RCCM through the CEPICI, the entrepreneur can approach a bank or the public guarantee fund. The page on loans for Ivorian businesses sets out these steps and the guarantees required.
Comparing with Ghanaian microfinance
In Ghana, microfinance went through a sweeping clean-up by the Bank of Ghana. The guide to microcredit in Ghana helps cross-border traders in Elubo and Noé compare the two systems and their rules.
Check the licence before depositing your savings
Before paying compulsory savings, ask for the institution’s licence number and check that it appears on the list published by the BCEAO. Unlicensed structures that collect deposits expose their customers to losses with no recourse.
Getting microcredit from an Ivorian microfinance institution
- Choose a licensed institution close to where you work, for example in your Abidjan district or town.
- Open an account, build up the required prior savings and, where needed, join a solidarity group.
- Receive a visit from the loan officer, who assesses the business, the stock and daily takings.
- Provide a guarantor or joint guarantee, then sign the contract and repayment schedule.
- Repay each instalment, at the branch or by mobile money, to move up to a larger loan cycle.
Costs of microcredit in FCFA
| Item | Benchmark | Variation |
|---|---|---|
| Microfinance usury rate | 24% a year (indicative) | Fees and commissions included |
| Prior savings | Variable | Amount and type of loan |
| Arrangement fees | Variable | Institution and loan cycle |
| Death insurance | Variable | Amount borrowed |
| Late payment penalties | Set in the contract | Number of days late |
Standard microcredit file in Côte d’Ivoire
- National ID card or consular card
- Passport photos
- Proof of address or location map of the business
- Trading licence, trade register or market certificate if available
- List of solidarity group members or guarantee commitment
- Orange Money, Wave or MoMo transaction history
Mistakes to avoid with Ivorian microfinance
- Holding loans at two or three institutions at once, now that microfinance institutions share their data with Creditinfo VoLo.
- Using a loan meant for the business to pay for a family ceremony, which jeopardises the weekly repayments.
- Paying savings to a structure that presents itself as microfinance without a licence from the Ministry of Finance.
- Agreeing to act as joint guarantor for someone the group barely knows, then having to repay in their place.
Lenders to contact
- Advans Côte d'Ivoire: Microfinance institution of the Advans network, with branches in Abidjan and the regions, financing small businesses and households underserved by traditional banks.
- CBI Baraka Côte d'Ivoire: Islamic finance window of Coris Bank International in Côte d'Ivoire, launched in 2018 and supported by a dedicated Shariah compliance function.
- Coris Bank International Côte d'Ivoire: Ivorian subsidiary of the Coris banking group, a commercial bank offering accounts, banking services and financing to individuals and businesses.
Ivorian microcredit: useful answers
Do I need a bank account to get microcredit?
No. The microfinance institution opens an account for the customer itself, often with minimum savings. It can also accept repayments by mobile money, which saves traders from closing their shop to go to a branch.
What is the maximum rate charged by microfinance institutions?
The effective global rate of decentralised financial systems is capped at 24% a year in the WAMU. This cap includes arrangement fees, commissions and insurance linked to the loan. A monthly rate on display must therefore be converted to an annual rate for comparison.
Can microcredit finance a first project?
Institutions prefer to finance an activity that has already been running for a few months. For a start-up, young project holders can look at Agence Emploi Jeunes programmes, and women at those of FAFCI, which work through financial partners.
How can I check that a microfinance institution is licensed?
The BCEAO publishes the list of authorised decentralised financial systems in each Union country. You can also ask for the licence number displayed at the branch and check it with the department in charge of microfinance at the Ministry of Finance.