MoU Signing Paves the Way for New DGRV Office in Benin

In March 2024, DGRV met with the project partners in Benin and signed two MoUs, one of them with FECECAM-Benin, by far the most important institution with the vision ‘to be a leading reference network in the sub-region for socio-economic development at grassroots level’ with a nationwide presence that has more than 1.3 million members with a total balance sheet of around EUR 200 million EUR. Once the DGRV office is established in the second half of 2024, the focus of the collaboration will be on strategic and organizational advice and training measures, supplemented by promoting the role of women in managerial positions.

Supporting Microfinance in Benin: Strengthening Agriculture

DGRV first became active in francophone sub-Saharan Africa in 2021 with the implementation of the regional project Agricultural Finance Africa based in Cameroon, which was extended and merged into the project promotion of cooperative structures in selected African countries in January 2024. In the first phase of the project, contacts were established with key players in the co-operative microfinance sector and with representatives of the banking supervisory authorities in Benin that made it possible to consider deepening partner relationships going forward.

Benin: A Reforming Nation in West Africa

Benin tallies 13.5 Mio. inhabitants with an average age of just over 18 years. The main rating agencies have recently emphasized strong trend growth, a moderate public debt-to-GDP ratio, a series of economic reforms – driven by President Patrice Talon, who was elected for a second term until 2026 – as well as prudent fiscal policy and proactive debt management. Patrice Talon argues in favor of a more autonomous attitude on the part of African governments and states that ‘the African continent is today solely responsible for its underdevelopment’. On the other side, it needs to be noted the rather low – albeit growing – government revenues, a relatively undiversified economy heavily exposed to neighboring Nigeria and the agricultural sector, as well as low development indicators compared to peers.

Challenges Ahead for Benin's Microfinance Sector

The high need for investment in the digitalization of products and processes, the lack of long-term financing, maintaining the quality of the loan portfolio at a satisfactory level while coping with external shocks and climate change and the constant need to train bank staff are associated with high costs. The government is helping by providing customized refinancing via the Fonds National de Development Agricole (FNDA) and passing a new microfinance law.


A Project Story of the Month / Team Africa, Holger Grimm



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