Financial Sector Policy Note : Financing Small and Medium-Sized Businesses in Burkina Faso
As in other Sub-Saharan African countries, small and medium-sized enterprises (SMEs) represent the vast majority of firms operating in the private sector in Burkina Faso. Private sector-led growth is a major element of Burkina Faso's poverty r...
| Main Authors: | , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/11/19456110/financial-sector-policy-note-financing-small-medium-sized-businesses-burkina-faso http://hdl.handle.net/10986/18696 |
| Summary: | As in other Sub-Saharan African
countries, small and medium-sized enterprises (SMEs)
represent the vast majority of firms operating in the
private sector in Burkina Faso. Private sector-led growth is
a major element of Burkina Faso's poverty reduction
strategy, la strategie de croissance accelere et le
developpement durable. Unfortunately, many characteristics
of Burkina Faso's business environment, and of
businesses themselves, make private sector-led growth a
challenge. This financial sector policy note focuses on the
market for credit and closely related financial services,
how private banks are providing these services to SMEs, and
recommendations that address problems they are having. This
requires understanding the behavior of banks with respect to
SME lending, particularly investment lending and related
financial products like leasing, guarantees, microcredit,
and subsidized credit funds. This policy note consists of a
study and survey of commercial banks and two non-bank
financial institutions (NBFIs) (Burkina Bail and Societe
Financiere de Garantie Interbancaire du Burkina (SOFIGIB)
focusing on lending to SMEs. It focuses on the supply side
of the market. The survey and accompanying interviews took
place during the summer of 2013. Twelve private banks and
five NBFIs were asked to participate in the study and
survey. The study references two additional surveys focused
on SMEs: (1) the 2009 World Bank enterprise survey, and (2)
the 2012 survey of SMEs commissioned by the ministry of
industry, trade, and artisans. The study consists of
observations and analysis of survey data to provide input to
policies for encouraging lending to SMEs and increasing the
provision of other financial services. This report is
structured as follows: executive summary; purpose and
structure of policy note; macroeconomic context and the
banking sector section provides a description of the
situation in which Burkina Faso finds itself. Demand for SME
finance section presents recent studies focused on the
demand for credit by SMEs. Supply of SME finance section
presents the results of the survey organized around the keys
issues facing the provision of credit to SMEs. Enabling
environment for financing SMEs section discusses salient
characteristics of the business, legal, and regulatory
environment that effect SME finance; recommendations; and conclusions. |
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