SHowever, classical banks, through the inappropriateness of their working methods and their lack of proximity, remain out of reach for the majority of the population. As for the informal lenders, they generally offer atrocious interest rates that are detrimental to the borrowers.
The Senegalese people have therefore found in microfinance the answer to their funding needs, and are turning more and more to Microfinance Institutions. These MFIs represent today a privileged tool in the fight against poverty since they offer funding to small and micro enterprises and offer financial products and services adapted to the most destitute populations.
The microfinance sector today in Senegal is expanding rapidly, as proven by the increase in number of Microfinance Institutions.
The number of MFIs recorded by the AT/CPEC cell has increased from 37 in 1995 to 884 on the 31st December 2006. Thus, we can today count:
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From this large number of structures emerge a dozen structures, mainly networks, which cover about 74% of membership, 90% of savings collected, and 86% of credit distributed.
MFIs offer financial services and products to active populations at different levels of the national economy.
Certain MFIs target specific groups (women, retired and elderly people…) regardless of their activity, or categories of operators linked to a given sub-sector (artisans, traditional fishermen, traders…). The activities funded by the MFIs cover a large range, and are more concerned with the informal sector than the so-called modern one, with a particular interest in women’s income generating activities. Among the activities funded we can cite: cow and sheep fattening, poultry farming, buying inputs, development of farms, market gardening, fishing, fish trading, fish processing, processing and marketing of agricultural products, craft industry, small trading, buying equipment, extension investments, forestry, buying food supplies during the food gap, different services offered, and also health, religious festivals, pilgrimages, etc.
However, the geographical distribution of these MFIs on the national territory is very unbalanced, with a high concentration in Dakar and Thies, and areas with very little cover like Matam, Tambacounda and Ziguinchor.
Regulatory and Institutional framework
The legal framework
Taking into account the particularity of MFIs, Senegal, following the example of the other UEMOA countries, has developed an appropriate legal framework for them. Thus, in November 1992, the Technical Assistance Cell for Popular Savings and Credit Banks (AT/CPEC) was created at the heart of the Ministry of Economy and Finance (MEF), to encourage the savings and loan mutual movement in Senegal and exercise the guardianship of the MEF over the MFIs.
We also saw the adoption of law 95-03 on the 5th January 1995 aiming to ensure the protection of depositors or savers, the security of financial operations, and the financial autonomy of institutions. The regulation provides for three types of institutions which are:
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Some of these Mutual Institutions can group together in networks, in order to unite their resources and competences. The networks operate on the national scale and reach a proven level of professionalism.
National Microfinance Policy
The Senegalese State has been active in the microfinance sector since the emergence, in the late 80s, of the first Microfinance Institutions with the support of financial backers and international technical operators. The role of the State has consisted in the creation of an environment favourable to the development of the sector through the implementation of structures of promotion, authorization, monitoring, and the support of institutional and professional stakeholders.
The will of the Senegalese government to make microfinance an efficient tool of mobilization of internal and external resources and to guarantee its link with the economy and financial markets has been materialised by the creation of the Ministry for Small and Medium-sized Enterprises (SMEs), of Women’s Entrepreneurship, and of Microfinance. This ministry ensures, together with that of Economy and Finances, the supervision of the microfinance sector. It is responsible for the promotion and development of this sector.
One of the biggest achievements of this new ministry is the development, with the collaboration of development partners, of a Letter of Sectorial Policy for Microfinance, a strategy, and a five-year action plan (2005-2010).
Previously, the Poverty Reduction Strategy Papers (PRSP) adopted in 2003 by the Senegalese government had fixed for the microfinance constituent the following aspects:
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443 Savings and Credit Mutuals (MEC)
