Popularised from the 1970s onwards by the Bangladeshi Muhammad Yunus, microfinance quickly established itself as one of the best instruments in the fight against poverty and financial exclusion. The success of the Grameen Bank, which won a Nobel Prize in 2006, has served as a model for the creation of new financial systems targeting the most disadvantaged in many developing countries.
However, recent findings on inequality reduction and poverty trends raise questions about the real impact of microcredit solutions, the flagship product of microfinance, in the least developed countries. Concerns that resonate particularly in West Africa, where these initiatives have multiplied during the 2000s.
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Microfinance is constantly developing in West Africa
In recent years, microfinance (and more specifically microcredit) has made significant inroads in Africa, particularly in West Africa. The latest available data on the sector confirms this upward trend. According to the Central Bank of West African States (BCEAO), the utilization rate of microfinance services (which measures the number of people holding deposit or credit accounts in microfinance institutions as a proportion of the adult population) in the WAEMU rose to 21% in 2018 against 19.4% in 2017.
The Bank’s latest report on the state of microfinance in the…