The agricultural sector and microfinance in Togo

Abstract

PURPOSE: The agricultural sector in Togo has a huge financing problem and numerous other problems mainly related to climate change.

METHODOLOGY: This study proposes a critical look at the microfinance sector and its relationship with the agricultural industry, which banking institutions have long abandoned.

RESULTS/FINDINGS: Based on data from major international institutions and the two most significant microfinance structures in the country, after some analysis, the results show that the microfinance sector in Togo is a very dynamic sector with strong growth, given its aggregates that continue to grow year after year. On the other hand, the share of agricultural credit in the portfolio of microfinance structures is constantly decreasing from year to year, demonstrating that microfinance is also starting to move away from the farming sector. Finally, the credits granted are not, for the most part, adapted to the financial needs of agricultural producers. Most of the time, these rural loans are insufficient or do not respect the cultivation calendars of producers. Also, access to these loans is prohibitive for many producers, primarily small-scale producers.