Small loans for Congolese traders and artisans
In the DRC, microcredit is provided by savings and credit cooperatives, microfinance institutions and a few specialised banks, all licensed by the Central Bank of Congo, to traders, artisans and farmers who are often shut out of conventional bank lending.
Three families of microfinance players
The Congolese sector brings together COOPECs, organised as cooperatives, microfinance institutions set up as companies, and inclusion-focused banks such as Advans Banque Congo. All of them need a BCC licence to collect savings or to lend money to the public.
COOPECs with a strong presence in the east
In North Kivu and South Kivu, savings and credit cooperatives have been established for decades, reaching even into rural towns. In Goma, Bukavu or Butembo they finance small trade, transport and the processing of farm produce for local markets.
FINCA RDC and incorporated institutions
FINCA RDC, active for many years, offers individual and group loans in Kinshasa, Lubumbashi and other cities. These institutions rely on loan officers who visit the business before any money is disbursed, checking stock, sales and the borrower's household situation.
Solidarity groups in Kinshasa markets
Several traders from the Liberté or Gambela markets form a group and stand surety for one another. If one member fails to repay, the others make up the instalment, which takes the place of the physical collateral they lack.
Prior savings and collateral
Most COOPECs require a savings period before the first loan, then block part of the amount borrowed. This compulsory saving reduces the risk for the institution but increases the effective cost borne by the borrower over the life of the loan.
Gradually rising amounts and short cycles
The first loan is modest, in Congolese francs or dollars, over a few months. Each loan repaid on time opens access to a larger amount, allowing a cloth seller or a phone repairer to expand their stock step by step.
Repayments by mobile money
Many institutions accept instalments via M-Pesa, Orange Money or Airtel Money, sparing customers a trip to the branch. The practice also reduces the handling of cash, which is a source of losses and fraud in busy markets.
The Fund for Financial Inclusion
The FPM, an investment fund dedicated to financial inclusion in the DRC, refinances and supports microfinance institutions. Its work aims to extend the supply of credit to rural areas and to micro-enterprises that are still poorly served by lenders.
Microcredit and farming
Loans to producers need to follow the harvest calendar rather than a monthly repayment schedule. Solutions suited to farmers in Kongo Central, Kasai or Ituri are developed on the page about the agricultural loan in the DRC.
An alternative to informal lending
Compared with market moneylenders, licensed microcredit offers a written contract and a clear repayment schedule. Savings groups and family loans, which still dominate, are compared in the guide to peer-to-peer loans in the DRC.
The neighbouring model in Brazzaville
In Congo-Brazzaville, microfinance institutions come under COBAC and BEAC and lend in CFA francs. The guide to microcredit in Congo-Brazzaville shows a different regulatory framework, but very similar financing needs among small traders.
Checking the licence before borrowing
Unlicensed cooperatives have already disappeared with their members' savings in the DRC. Consulting the list of authorised institutions published by the Central Bank of Congo before making any deposit protects you against such failures and embezzlement.
Getting a first microloan in Congo-Kinshasa
- Find a COOPEC or a BCC-licensed microfinance institution close to where you do business.
- Open a savings account and build up the required prior savings over the stated period.
- Receive a visit from the loan officer, who assesses the business, the stock and the takings.
- Form a solidarity group or put forward a guarantor if the institution asks for one.
- Sign the contract, receive the funds and repay according to the schedule, often by mobile money.
Real cost of a microloan in the Democratic Republic of the Congo
| Item | Benchmark | What makes it vary |
|---|---|---|
| Interest rate | Higher than a bank loan | Institution, amount, term, currency |
| Arrangement fee | Deducted at disbursement | Institution's policy |
| Blocked savings | Share of the loan held back | COOPEC or MFI, customer's cycle |
| Mobile money commission | Fee for transferring the instalment | Operator, amount |
| Death insurance | Small premium, often compulsory | Loan amount |
Documents requested by Congolese COOPECs and MFIs
- Voter card or other identity document
- Recent passport photos
- Certificate of residence or a map showing how to reach your home
- Proof of activity: trading licence, trader's card or certificate from the market chief
- Savings book or statement from the institution
- Guarantor's identity document or list of group members
What jeopardises a microloan in the DRC
- Using a loan meant for stock on a family expense, then lacking the takings needed to repay.
- Borrowing from several COOPECs at once and repaying one with money from another.
- Depositing savings in a cooperative not licensed by the BCC that promises its members abnormally high interest.
- Paying a so-called agent who claims to guarantee loan approval in return for a cash commission.
- Joining a solidarity group without knowing how reliable the other members are, then having to pay their missed instalments for them.
Lenders to contact
- Advans Banque Congo: Microfinance bank of the Advans network in the Democratic Republic of Congo, financing micro, small and medium enterprises, notably in Greater Katanga.
- Rawbank: Major Congolese commercial bank allowing customers to submit an online credit application, for individuals as well as businesses and organisations.
- Trust Merchant Bank (TMB): Congolese commercial bank with a presence across many provinces, active in lending to individuals, small businesses and micro-entrepreneurs.
- Rawbank: Congolese commercial bank offering banking services to individuals and professionals, with dedicated credit lines for financing micro, small and medium enterprises.
Congolese microcredit in questions
What is the difference between a COOPEC and a microfinance institution in the DRC?
A COOPEC is a cooperative owned by its members, who both save and borrow. A microfinance institution is a commercial company that lends to its customers. Both are supervised by the Central Bank of Congo, under different rules.
Can you get a microloan without collateral in the Congo?
Yes, thanks to group lending and joint guarantees, or to blocked prior savings. Amounts are modest at first. For larger sums, the institution often asks for a guarantor, a pledged asset or a repayment track record.
Are Congolese microloans granted in dollars?
Some institutions lend in dollars, others in Congolese francs. A trader who sells in francs may prefer a loan in CDF to avoid exchange rate risk, even if the advertised rate looks higher.
How long does a microloan last in the DRC?
Cycles generally range from a few months to a year, with weekly, fortnightly or monthly instalments. Agricultural loans may provide for repayment at harvest time. Each successful cycle gives access to a larger amount.