In this interview, the Director General (DG) of the National Fund for Inclusive Finance (FONAFI), discusses, among other things, the notion of inclusive finance, its challenges for socio-economic development, the efforts of the Burkinabè State to improve the access of vulnerable strata to credit.

Sidwaya (S): What is inclusive finance or financial inclusion?

Wango Fidèle Yaméogo (WFY): The terms “Inclusive Finance” and “Financial Inclusion” have the same meaning. In Burkina Faso, the definition of financial inclusion is that adopted in the National Strategy for Inclusive Finance adopted in April 2019 by the government. According to this strategy, financial inclusion is defined as a set of mechanisms allowing everyone to access and effectively use a range of financial products and services at affordable costs offered by healthy institutions. This definition is inspired by that of the BCEAO, which defines financial inclusion as being the permanent access of populations to a diversified range of appropriate financial products and services, at affordable costs and used in an effective, efficient and efficient manner.

S: Is it a trendy concept or a real development tool?

WFY: The 2030 Agenda for Sustainable Development, known as “Agenda 2030”, adopted on September 25, 2015 in New York, has set itself 17 Sustainable Development Goals (SDGs), eight of which target financial inclusion. This means that financial inclusion is not just a buzzword. Also, it is at the heart of the concerns of States, central banks and international institutions as a privileged instrument for the integration of disadvantaged social strata into the economic and social fabric. It is in this dynamic that the Burkinabè government granted an important place to this theme in 2016 in the National Plan for Economic and Social Development (PNDES), in particular in its axis 3 which advocates the revitalization of promising sectors for the economy. and jobs. In order to better address this approach, a national inclusive finance strategy has been adopted to serve as a frame of reference for all actors working to promote financial inclusion. Also, it should be noted that the importance of financial inclusion no longer needs to be demonstrated in the context of poverty reduction. It enables individuals, households and small and medium-sized enterprises (SMEs), as well as all players excluded from the financial system, to participate in economic life and the creation of wealth through the provision of a range of financial products and services by financial service providers. Through the development of financial products and services, financial inclusion also promotes the financing of the economy and the stability of the financial system.

S: What inventory can we make of financial inclusion in Burkina Faso?

WFY: It should be remembered that the Burkinabè financial landscape includes a diversity of actors. As financial service providers, there are 15 banks and 4 financial establishments, 132 microfinance institutions, 13 insurance companies, 20 national funds. Added to this are the Public Treasury, La Poste Burkina, electronic money establishments, etc. The players involved in promotion, regulation and supervision include, among others, the Central Bank of West African States (BCEAO), the Ministry of Economy, Finance and Development (MINEFID), the Electronic Communications and Postal Regulatory Authority (ARCEP), the Professional Association of Banks and Financial Institutions (APBEF), the Professional Association of Decentralized Financial Systems (APSFD), the Professional Association of Insurance of Burkina (APSAB). Several technical and financial partners support the government in the development of the financial inclusion sector. These include the World Bank , the West African Development Bank, Luxembourg cooperation through projects and programs. In addition, several Non-Governmental Organizations (NGOs) have a strong interest in financial inclusion, including AGRI+, Plan-Burkina, Catholic relief services, NGO consultation framework active in education. In terms of statistics from the BCEAO , at the end of 2019, Burkina Faso recorded on the basis of the population aged 15 and over, a strict banking rate of 23.2% against a regional average of 18.08%. ; an extended banking rate of 43.42% against an average of 39.7% in the WAEMU zone and a financial inclusion rate of 70.86% against a regional average of 60.11%. These national rates, although higher than the regional averages, deserve to be improved with the help of all the actors.

S: In April 2019, Burkina Faso adopted a National Inclusive Finance Strategy. What are the objectives?

WFY: Following the adoption of the WAEMU Regional Financial Inclusion Strategy by the Council of Ministers of the Union on June 24, 2016, each member country was invited to develop its own strategy taking into account of its economic and social realities. It is in this context that Burkina adopted a National Strategy for Inclusive Finance in April 2019, the overall objective of which is to increase to 75% the proportion of the Burkinabè adult population having access to and using affordable and appropriate financial products and services by 2023. Also, three impacts are expected from the implementation of the SNFI, namely the improvement of the supply of quality financial products and services, the improvement of the financial education of the adult population and the increase in the proportion of the adult population using a range of adapted financial products and services.

S: What is planned for the promotion of financial inclusion in rural areas, for vulnerable groups?

WFY: The challenges in terms of promoting financial inclusion in rural areas are immense given the preliminary results of the 5th General Population and Housing Census which show that out of the 20,487,979 inhabitants of our country, approximately 74% live in rural areas. The major actions will focus on continuing to build the capacity of the population in financial education to give them the knowledge required in financial matters so that they can make better decisions. Emphasis should also be placed on the deployment of financial service providers in areas not yet served, without forgetting the development of partnerships between professional organizations and financing institutions.

S: On September 10, 2020, Burkina Faso also set up a National Fund for Inclusive Finance (FONAFI) of more than 44 billion FCFA. Who are the beneficiaries?

WFY: FONAFI stems from the will of the President of Faso to support the informal economy in general and vulnerable groups in particular to access financial services adapted to their needs.

FONAFI is a public State establishment, classified in the category of national financing funds. It is a fund that covers the entire national territory and has already selected 10 DFS partners to benefit from refinancing. The beneficiaries of FONAFI are made up of women in rural and semi-urban areas, active or potentially active, groups of farmers (agricultural production), fattening breeders (poultry, sheep, cattle), small traders and MTPE in urban and rural environment and manufacturers and processors of local products.

Sidwaya (S): Through what mechanisms, channels or modalities will these beneficiaries be able to access the resources of the fund?

WFY: The FONAFI is not part of the direct funding but in the strategy of making-do. This means that we go through a number of financial service providers, namely microfinance institutions, national funds and even traditional banks to reach our target audience of women, young people, farmers, small and medium enterprises. On the national territory, there are about ten national funding funds such as the Support Fund for the Promotion of Employment (FAPE), the Support Fund for the Informal Sector (FASI), the Funding Agency and promotion of small and medium-sized enterprises (AFP-PME), the FARF, etc. At the level of microfinance institutions, we selected 16 following a call for projects. These include, among others, the Network of Credit Unions of Burkina Faso (RCPBF), PRODIA, Graine, FINEC, BTEC, the Savings and Credit Cooperative/Boucle du Mouhoun, COFINA, etc. In the choice of these institutions, we take into account the geographical coverage of the national territory, the proximity with the populations and the orientations of the government and the technical and financial partners. As part of the project to promote inclusive finance in Burkina Faso, in partnership with the West African Development Bank (BOAD ) . FONAFI intends to mobilize more than 44 billion FCFA, including 10 billion FCFA already acquired for the benefit of the target populations, through financial service providers. As part of the fight against the COVID-19 pandemic, the State has also made available to FONAFI, 5 billion FCFA in order to relieve the populations who have been strongly impacted by this health crisis. We urge people to contact these local financing structures in order to benefit from the support of the National Fund for Inclusive Finance. We have already made funds available to these institutions to facilitate vulnerable people's access to finance.

S: By applying to these financing structures, will the target populations have access to financing at preferential rates?

WFY: Absolutely! The objective of FONAFI, according to the guidelines of the highest authorities of the country, is to bring certain financial institutions to revise the rate of exit for the benefit of the final beneficiary downwards, in particular to less than 10%. Because exit rates are often high, due to the fact that financial institutions lend on the financial market at rates around 10% to re-lend at more than 20%. Through BOAD , the Burkinabè State was able to obtain support for the benefit of these financial institutions at a rate of 3% which, in turn, must apply exit rates of 8% to 10%, no more! At the level of the COVID-19 fund, the State has retroceded to these microfinance structures at an exit rate of 0.5% for 70% in the form of credits and 30% in the form of grants without reimbursement. And at this level, the institutions are obliged to apply an exit rate of 3.5%. FONAFI has just been set up and we are gradually working to achieve the objectives of reducing exit rates.

S: What could be the obstacles to the promotion of financial inclusion in the land of upright men?

WFY: Three risk factors could jeopardize the promotion of financial inclusion in Burkina Faso. There is insecurity in some localities which limits the establishment of financial institutions in high-risk areas. There is also a lack of infrastructure to enable financial institutions to increase service points and offer more products adapted to the needs of populations. And finally, the lack of funding for building the technical and material capacities of financial service providers.

S: What are the main challenges that Burkina must meet to better promote inclusive finance?

WFY: The major challenges to be met in terms of financial inclusion revolve around five points.

First, improve the availability and supply of credit by strengthening the supply of credit products, consolidating support mechanisms for financing institutions and providing DFS with access to additional resources. Second, promote the implementation of digital finance by emphasizing the use of digital financial services and related innovations. Third, improve the availability of agricultural financing through the development of financial products and services for agricultural financing and the development of mechanisms to facilitate access to agricultural financing. Fourth, improve risk coverage options by developing insurance products more suited to the main needs of low-income people, promoting savings products suitable for low-income people and supporting the regulatory environment for innovation of insurance and savings products. Fifth, strengthen policies, regulations and supervision by strengthening the capacities of institutions, the capacities of populations in financial education, the protection of clients of financial services and by cleaning up the microfinance sector in Burkina Faso.

S: On December 17 and 18, 2020, the National Consultation Framework for Financial Inclusion Actors (CNC-AIF) was held. What were the main conclusions of this meeting?

WFY: The National Consultation Framework for Financial Inclusion Actors was created by Order No. 2018-495/MINEFID/CAB/SP-PMF of November 21, 2018. Its objective is to create a synergy of actions between the actors involved in financial inclusion in Burkina Faso. The said framework held its first session on December 17 and 18, 2020 under the central theme: “National consultation framework for financial inclusion actors in Burkina Faso: what challenges for capitalizing on sector interventions? At the end of the work, there are real grounds for satisfaction with the adoption of eight recommendations relating to:

– the establishment of a national program of integrated financial education;

– consideration of tax incentives to enable DFS to set up in underserved areas;

– the promotion of micro-insurance services for the benefit of farmers;

– the establishment of a financing window dedicated to Fintech;

– the establishment of formal strategic sectoral coordination of technical and financial partners, for the mobilization of funding;

– a review of the order creating the CNC-AIF to harmonize it with sectoral strategic coordination;

– the establishment of a monitoring and evaluation mechanism for better visibility of the interventions;

– strengthening communication in the financial inclusion sector.

In addition to these recommendations, the participants resolutely committed themselves to play their part for an optimal implementation of the SNFI.