The development objective of the Financial Sector and Governance Project for Togo is to improve financial sector stability. The project will provide technical assistance to various stakeholders to support the financial sector reform program of the Government of Togo. There are four components to the project.
The first component of the project is banking sector restructuring. It will provide technical assistance to ensure that the financial and institutional restructuring of three public banks (BTCI, BIA, and UTB) is completed. This will involve identifying strategic banking investors for Togolese state owned banks: Banque Togolaise pour le Commerce et l’Industrie (BTCI), Banque Internationale pour l ‘Afiique (BIA), Union Togolaise de Banque (UTB) as well as Banque Togolaise de Developpement (BTD), which is not under restructuring.
The second component of the project will focus on strengthening the stability of the microfinance sector through improved external supervision and strengthened internal controls within microfinance institutions (with a focus on increasing the capacity of network institutions to supervise their member’ institutions). Microfinance is a huge market and struggles against lack of banking services. This form of intermediation tries to control the informal sector. It responds properly to the needs of the population especially the poor. It counts many players of varying size: small local NGOs to “multinational” microfinance sometimes exceeding the size of some banks. In late 2007 there were 439 MFIs in Cameroon managing 162 billion CFA in credits i.e. 4 times more than in 2001. Number of clients was multiplied by 7 on 6 years but with the volume of resources still marginal compared to banks: less than 7% in 2007, but a rise in bad loans (currently 6.5% while the acceptable limit is 5%).
The third component of the project is reforming the pension sector of the two social security institutions (Caisse de Retraite du Togo (CRT), and Caisse Nationale de Securite Sociale (CNSS)) to restore their financial viability.
The fourth component of the project is support to the implementation of reforms in the financial and private sectors. This component will provide technical assistance to the Reform Secretariat and the Economy Directorate within the Ministry of Economy and Finance to strengthen their capacity to formulate policies in the financial and private sectors. This component will also aim at improving public private sector dialogue.
Source: from author and Worldbank,
March 2009.
