• Microfinance deposits in Togo increased by CFA11.9 billion, a 2.7% rise in the second quarter of 2025, according to BCEAO data.

• Outstanding microfinance loans fell by 1.9%, or CFA7 billion, making Togo a negative outlier alongside Mali in the UMOA.

• The gross non-performing loan ratio reached 10.9% at end-June 2025, far above the regional benchmark of 3%.

In Togo, microfinance plays a central role in financial inclusion. As purchasing power comes under pressure and liquidity needs rise, institutions have stepped up efforts to mobilize local savings to support lending activity.

In the second quarter of 2025, microfinance institutions in Togo recorded an increase of CFA11.9 billion in deposits, representing growth of 2.7%. This performance lagged behind results in Burkina Faso and Senegal, but it exceeded those recorded in Benin and Niger over the same period, according to consolidated data from the Central Bank of West African States (BCEAO).

By contrast, lending activity slowed during the quarter. Outstanding microfinance loans declined by CFA7 billion, equivalent to a 1.9% contraction, amid tighter financing conditions or increased risk aversion among financial actors. In this respect, Togo stood out as a negative exception within the West African Economic and Monetary Union (UMOA), alongside Mali, while Côte d’Ivoire, Senegal, and Benin posted loan growth ranging from 1.6% to 3.4%.

This cautious stance reflected a broader deterioration in portfolio quality across the region. The gross non-performing loan ratio reached 10.9% at the end of June 2025, well above the community standard of 3%. Togo also counted one microfinance institution under provisional administration, out of a total of ten across the Union.

Overall, Togo’s microfinance sector continued to play a key role in financial inclusion, supported by rising savings and a growing customer base. However, credit momentum and risk management remained the main areas of concern for the second half of the year.

More broadly, this trend extended a trajectory already observed in the first quarter of 2025. During that period, microfinance institutions had already recorded strong deposit growth, reaching CFA436 billion, while outstanding loans had contracted sharply. Between March and June, the decline in lending continued at a slower pace, easing from a 5.2% drop to a 1.9% quarterly contraction, while savings continued to grow faster than credit supply.

In Togo, the microfinance sector includes nearly 70 institutions, which remain essential for financing households and small-scale economic activities. Across the UMOA region, the sector counts 527 microfinance institutions serving nearly 19.9 million clients.

This article was initially published in French by Ayi Renaud Dossavi

Adapted in English by Ange Jason Quenum