Role of financial institutions in the promotion of micro and small enterprises in Burkina Faso : evaluation and analysis of funds flow

So far, the only type of assistance that has shown sustainable impact is credit. This study examines the volume and type of credit provided to MSE"s in Burkina Faso by various financial institutions, including banks, finance companies, credit unions, credit programs, and nongovernmental organizations. The study analyzes the supply of credit and financial services through formal channels and estimates to what degree the services meet demand. A major finding is that only a tiny amount of funds reach MSE"s by formal channels. They receive about 9% of available funds, compared to 48% for large enterprises. About 87% of the amount lent to MSE"s is in the form of overdraft facilities as commercial credit. Enterprises in the individual and micro category receive almost nothing through formal channels, despite the fact that they contribute 23% of GDP. Furthermore, due to current restructuring of the banking sector, there is a trend away from lending to small businesses. At the same time, for the country"s current privatization drive to be successful, it will require a dynamic small business sector. It is not clear if these companies will have access to the resources needed to take advantage of new opportunitiesAction recommendations are presented, followed by appendices on banks, savings and credit cooperatives, other financial institutions, credit programs, and small business investment support projects.