Small loans in Mauritania: savings cooperatives, women's mutuals and licensed microfinance
In Mauritania, microcredit is provided by some thirty institutions licensed by the Central Bank, from PROCAPEC savings cooperatives to women's mutuals. They lend small sums in ouguiyas, often to solidarity groups of traders, artisans and herders shut out of the banks.
The 2007 microfinance ordinance
The 2007 ordinance on microfinance institutions replaced the 1998 law. It gives the BCM responsibility for licensing and supervising these institutions and was supplemented by prudential instructions issued in 2007 and again in 2012.
Three categories of licensed institutions
Category A covers savings and credit cooperatives and associations serving their members. Category B brings together public limited companies open to the general public, and category C covers programmes that only grant credit without collecting savings.
The PROCAPEC network of savings cooperatives
The PROCAPEC network federates popular savings and credit funds, the CAPECs, present in Nouakchott and several wilayas. Members save first, then gain access to a loan in proportion to their length of membership and their savings.
Beit el Mal and microfinance companies
Beit el Mal, born of the Twize housing programme, and Sahel Finance were among the first licensed microfinance companies. They finance small businesses and, in Beit el Mal's case, home improvements in the outlying districts of the cities.
MAFEC and GFEC women's mutuals
Mutuals of women's associations such as MAFEC and women's savings and credit groups serve traders, seamstresses and women processing fish or milk. Women find access there that banks rarely offer them, along with savings habits and peer support.
Solidarity groups in the Twize spirit
Many institutions lend to groups of five to ten people who guarantee one another, in the spirit of Twize. This model, close to the rotating savings groups covered in our page on peer-to-peer loans, reduces the need for physical collateral.
Sector size and modest portfolios
According to published data on housing finance in Africa, Mauritania had around thirty active microfinance institutions in 2022, with a total loan portfolio of about nineteen million dollars, very small compared with bank lending.
Activities financed in the wilayas
Loans are used to buy a stock of fabric, sheep for Tabaski, a freezer for selling fish or sewing equipment. In Kiffa, Aleg or Kaédi, they also finance small farming and livestock activities run by households.
From microcredit to an SME loan
Once the business is stable, a micro-entrepreneur in Nouakchott or Nouadhibou can aim for larger financing from a conventional or Islamic bank. Support schemes are described in our guide to business loans in Mauritania.
Islamic microfinance and murabaha
Some institutions offer interest-free financing in the form of murabaha: the institution buys the goods and resells them to the member with a margin. This format meets the demand of many borrowers committed to religious principles.
APROMI, the professional association
APROMI, the association of microfinance professionals founded in 1999, represents the sector before the authorities. Before committing, however, check the institution's licence on the list published by the Central Bank of Mauritania.
What the Malian example shows
In Mali, more than a hundred decentralised financial systems serve over a million clients, a much larger sector than the Mauritanian network. The comparison is set out in our page on microcredit in Mali for readers who want the detail.
Getting a microloan in Mauritania
- Find a BCM-licensed fund or institution close to your neighbourhood or market.
- Join by paying the membership share and open a savings account, sometimes required several months before the loan.
- Present your activity, your takings and your precise need to the loan officer or the solidarity group.
- Build up the required guarantee savings and obtain the commitment of the group's guarantors.
- Sign the contract, receive the funds and keep to the weekly or monthly repayment schedule.
Cost components of a microloan in MRU
| Item | How it works | What makes it vary |
|---|---|---|
| Membership share | Paid on joining a fund | Institution's statutes |
| Guarantee savings | Blocked until repayment | Loan amount, length of membership |
| Interest or margin | Annual rate or murabaha margin | MFI category, term |
| Arrangement fee | Flat fee on approval | Institution's fee schedule |
Documents a microfinance institution asks for
- Biometric ID card with NNI
- Recent passport photo
- Written or oral description of the activity
- Neighbourhood residence certificate
- Guarantee commitment from group members
- Savings passbook or account statement
Microcredit pitfalls in Mauritania
- Borrowing from several funds at once to repay one with another, a spiral that ends up weakening the whole solidarity group.
- Using a loan meant for trading to pay for a family celebration, leaving the business without funds to repay.
- Entrusting savings to an organisation not licensed by the BCM that promises fast, cheap loans.
- Neglecting the weekly repayment schedule, when delays penalise every member of the guarantee group.
- Accepting a larger loan than needed, offered by a loan officer in a hurry to meet targets.
Lenders to contact
- Banque pour le Commerce et l'Industrie (BCI Mauritanie): Mauritanian commercial bank providing banking services and financing to individuals, professionals and companies operating within the country.
Questions about Mauritanian microfinance
Who supervises microfinance institutions in Mauritania?
The Central Bank of Mauritania licenses and supervises microfinance institutions under the 2007 ordinance. It classifies them into three categories according to their legal form and whether or not they may collect savings from the public.
Does a PROCAPEC fund require savings before granting a loan?
In the popular funds of the PROCAPEC network and in many mutuals, yes. Members first build up savings, which then serve as partial collateral and determine how much they can borrow.
Is microcredit available outside Nouakchott?
Yes, several networks have branches in regional capitals and some rural localities. Coverage remains uneven, however, especially in eastern wilayas such as the two Hodhs, where distances make loan follow-up harder for loan officers.
Is there microcredit that complies with Islamic finance?
Some institutions use murabaha: they buy the goods or equipment and resell it to the member with a fixed margin. The contract must specify the item purchased, the resale price and the repayment schedule.