The activity of Decentralized Financial Systems (SFD) or microfinance in Togo, has become a panacea for several adventurous entrepreneurs in this field who pursue personal enrichment to the detriment of the financial well-being of subscribing members. Every year, we witness the disappearance of microfinance managers with the funds saved.
The objective of many microfinance managers in Togo is very far from that of the first initiators of this noble activity which should allow the disadvantaged strata to have access to credit. The Bangladeshi Muhammad Yunus, 2006 Nobel Peace Prize winner and initiator of the idea of microfinance in the world, would be amazed if he witnessed what is happening in this sector in Togo.
It is important to specify that not all sheep are black in this sector of activity. On the Togolese market, there are Decentralized Financial Systems that demonstrate rigor in the management of members’ savings. However, the “bad seeds” are plethoric. Recurringly, we see that microfinance managers almost disappear with the funds saved by simply and purely closing the doors.
The latest is that of microfinance called “Divine Grace” whose members are currently in complete desolation. The branches of this microfinance are no longer open. However, this structure is well registered and has an approval N°399/MATDCL/DLPAP/SG/DOCA.
Why such a state of affairs?
It would seem that the Togolese State no longer grants approval for Decentralized Financial Systems. For this reason, there are plenty of microfinance companies operating illegally, surprisingly in full view of everyone. Some of them have seen their approval withdrawn, but continue to collect savings cheerfully.
Moreover, the management of microfinance in Togo suffers badly from competence. The WAEMU banking law which governs banks is very demanding on the skills of directors and executives of these establishments. Conversely, microfinance is left in the hands of entrepreneurs who have no concept of management. Worse, they are reluctant to recruit competent people to ensure the proper management of members’ funds.
All these reasons cast discredit on this sector which is supposed to raise the financial level of poor populations.