MICROCAPITAL BRIEF: BCEAO Revising Microfinance Regulation to Promote “Responsible” Digital Financial Inclusion in West Africa; Supported by FAPSFD, UNCDF

The Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), the central bank of the eight countries of the Union Economique et Monétaire Ouest Africaine (UEMOA), is finalizing an updated set of regulations on microfinance with support from institutions including the UN Capital Development Fund (UNCDF) and the Fédération des Associations Professionelles des Systèms Financiers Décentralizés (FAPSFD), which represents groups of microfinance practitioners in each country of UEMOA. FAPSFD President Azartou Sondo Nignan explains that “BCEAO has been in the process of revision for over a year in order to create the conditions for the harmonious development of the UEMOA economies, through the restructuring of the sector, pledging adequate funding and promoting responsible and sustainable financial inclusion.”

Another goal of revising the law is to address the technological advancements that have taken place since the law was last revised in 2007. With the backing of Luxembourg Cooperation, a unit of the Luxembourg Government’s Ministry of Foreign and European Affairs, UNCDF consulted on the aspects of the draft law that relate to “the challenges and opportunities of digital for Decentralized Financial Services.” UNCDF also supported a workshop held at FAPSFD as part of an effort “to validate the preliminary draft law.”

Established in 1966 by the UN General Assembly, UNCDF is affiliated with the UN Development Programme. UNCDF endeavours to create opportunities for poor people in developing countries and their small businesses by increasing access to microfinance and other forms of investment capital. The organization operates in 40 countries in Africa and Asia with a particular commitment to countries emerging from crises. During 2018, UNCDF’s expenditures totalled USD 65 million. As part of its work, it supported financial services providers that serve a total of 32 million customers.

By Madigan Ruch, Research Associate

Sources and Additional Resources

UNCDF article on revising microfinance regulation in West Africa
https://www.uncdf.org/article/5814/rvision-de-la-loi-rglementant-la-microfinance-dans-la-zone-uemoa

BCEAO homepage
https://www.bceao.int/

UEMOA homepage
http://www.uemoa.int/

FAPSFD homepage
http://www.fapsfd-uemoa.org/

Luxembourg Directorate for Development Cooperation, microfinance activity
https://cooperation.gouvernement.lu/en/partenaires/microfinance.html

Previous MicroCapital article on UNCDF
https://www.microcapital.org/microcapital-brief-mobi-changa-thundafund-uncdf-crowdfunding-platform-to-help-youth-women-in-the-gambia-raise-money-for-msmes-build-financial-histories/

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