Lending or borrowing between relatives in Senegal safely
In Senegal, lending between individuals mostly takes the form of family advances and tontines known as natt; it remains legal if it is documented and its cost does not exceed the 24% usury cap that applies to non-bank lenders.
A practice rooted in Senegalese social life
Between relatives, neighbours or members of the same dahira, lending money is often an act of solidarity. The sum is handed over in cash or through Wave, without a contract, which works as long as the relationship stays good.
The natt tontine, rotating credit among members
In a natt, each member contributes regularly and takes the pot in turn. For the first in line it is an interest-free loan; for the last, it is forced savings. Women's groups in Pikine are among the biggest users.
Digital natt and contributions by mobile money
More and more tontines collect contributions through Orange Money or Wave, which leaves a useful trail in case of dispute. The group's president nevertheless keeps a contribution register signed by every member.
When a Senegalese tontine goes wrong
A member who disappears after collecting the pot leaves the others without any simple remedy. Setting the order of payouts in writing and excluding strangers limits this risk, which is common in large neighbourhood tontines across Dakar.
Written IOUs and certification at the town hall
For a large loan, a dated and signed acknowledgement of debt stating the amount in XOF, the repayment schedule and the identity of both parties is essential. Having the signatures certified at the town hall strengthens its value as evidence.
Interest between individuals and the legal cap
Nothing prohibits charging interest, but the WAMU usury rules also cover other economic agents: above an APR of 24%, the loan becomes usurious and exposes the lender to criminal penalties under the regional framework.
Informal collateral: jewellery, land papers and phones
Leaving gold jewellery, a plot document or a phone as security is common. Without a written agreement on their return, these pledges cause conflicts, and an original land title should never be handed to a private lender.
Remedies when a private loan is not repaid
After an attempt at family or religious mediation, the creditor can take the acknowledgement of debt to the local court. A written formal notice generally comes before the payment order procedure provided for under OHADA law.
Crowdfunding platforms reaching Senegalese savers
A few crowdfunding platforms, particularly those focused on agriculture and small businesses, connect lenders and borrowers. Their status should be checked with the competent authority before investing any money, because the regional regulations are still recent.
Fake lenders on Senegalese Facebook and WhatsApp groups
Facebook pages and WhatsApp groups promise quick person-to-person loans in exchange for processing fees. Once payment is made by mobile money, the lender vanishes; the police Special Cybersecurity Division handles complaints of this kind.
Turning to a licensed institution instead
If family cannot help, a credit union offers a more protective framework; microcredit in Senegal presents the accessible microfinance institutions, and loans without a job in Senegal covers options for people without a salary.
Similar practices in Mali
In Mali, also a WAMU member, tontines and family loans are subject to the same usury cap; peer-to-peer lending in Mali describes customs close to those in Senegal, particularly among traders in Bamako and Kayes.
Putting a loan between relatives in Senegal on a sound footing
- Agree the amount in CFA francs, the term and any interest, kept below the usury cap.
- Draft an acknowledgement of debt with identities, ID numbers and the amount in figures and words.
- Have the signatures certified at the town hall or by a notary for larger amounts.
- Pay the funds by bank transfer or mobile money so that there is proof of the transfer.
- Record each repayment received and give the borrower a signed receipt.
Possible costs of a private loan in Senegal
| Item | Benchmark | Comment |
|---|---|---|
| Agreed interest | 24% APR maximum (indicative) | Above this, the loan is usurious |
| Signature certification | Modest fee at the town hall | Depends on the municipality |
| Notarial deed | Notary's fees | Loan amount |
| Mobile money transfer | Free or with a commission | Chosen operator |
| Court recovery | Procedural costs | Amount and lawyer |
Useful documents to secure a private loan
- Signed and dated acknowledgement of debt
- Copies of both parties' biometric ID cards
- Proof of payment: Wave or Orange Money receipt, or bank transfer
- Written repayment schedule
- List of members and the tontine's rules
Risks to know before lending or borrowing privately
- Paying processing fees to an unknown lender met on Facebook, who cuts all contact after the Wave transfer.
- Lending a large sum to a relative without anything in writing, then having no proof to present in court.
- Setting a high monthly interest rate that actually exceeds the 24% annual cap and makes the loan usurious.
- Handing over the original of a property deed as security, at the risk of it being used for a fraudulent sale.
Lenders to contact
- Baobab Sénégal: Microfinance institution of the Baobab group operating in Senegal, specialising in loans to micro-entrepreneurs, small businesses and SMEs.
- Coris Bank International Sénégal: Senegalese subsidiary of the Coris banking group, a commercial bank offering accounts, banking services and financing to individuals and businesses.
Clarifications on private loans in Senegal
Does a loan between friends in Senegal have to be declared?
No declaration to the BCEAO is required for an occasional loan between individuals. However, lending regularly for profit is a regulated activity reserved for licensed institutions, and doing so without a licence can be penalised.
Are natt tontines legal?
Yes, the tontine is a mutual savings and credit practice that is tolerated as long as it stays among members who know each other. It has no guarantee, however, and losses if a member runs off are not covered.
Is a handwritten acknowledgement of debt enough?
It counts as evidence if it is dated, signed and states the amount. Certifying the signatures at the town hall or using a notarial deed makes it harder to challenge before a judge in the event of a dispute.
Where can an online loan scam be reported in Senegal?
Online fraud can be reported to the Special Cybersecurity Division of the national police or at a police station. It helps to keep screenshots, phone numbers and mobile money transfer receipts as evidence for the investigation.