Islamic Development Bank (IBD) releases 750 million francs CFA to strengthen micro-finance in Benin (Africa)

The Islamic Development Bank (IBD) has released over 750 million francs CFA in order to support micro-finance in Benin, official sources told APA Tuesday in Cotonou.

The micro-finance funding project, which will cost 1.5 million US dollars, of which 1.3 million will be supplied by the Islamic Development Bank and the rest by the Beninese government, is aimed at facilitating and increasing the possibilities of access to micro-credits for project leaders who do not have access to classical banking systems.

“The support for micro -finance also constitutes an effective means of fighting poverty”, Djibril Moriba, the Principal Private Secretary of the Beninese Micro-finance ministry said.

The micro-finance sector in Benin is managed by various players, particularly mutual benefit funds, savings and loans cooperatives, direct credit institutions, projects and non-governmental organizations.

“Micro-finance institutions reveal to be more appropriate in promoting access to financial services for the underprivileged with an eye to enhancing the association and community approach, to adopting mechanisms and measures aimed at formalizing the economy of decentralized entities, to intensifying funding mechanisms that are specific to women’s activities, particularly in the rural sector”, sources said.

Thus, according to the Beninese ministry of finance and economy, the proliferation of micro-finance institutions noted in the recent years in the country causes a great loss for the Beninese economy.

“Out of more than 1300 representations, agencies and branches of over 760 microfinance institutions distributed across the entire country, less than 200 were authorized by the microfinance department and over 560 are operating illegally”, sources deplored.

Source : African Press Agency (APA)

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