Presentation. Micro-finance is essential for development and Mr Rémy BAYSSET considered, from the very beginnings of FINANCIAL Group, that it represented a major growth opportunity and that the commercial banks owed it to themselves to invest fully in it so as to reach customers who do not have any connections with the traditional banking system. 

Mrs Saïdatou Lawani is a gold jewellery retailer. She took out her first loan of 500,000 CFAF in November 2000. Altogether, she has received eight loans from FINADEV BENIN totalling 8.2 million CFAF.

FINANCIAL BANK BENIN approached the main participants and customers in the micro-finance sector at a very early stage. As early as 1995, it introduced its ‘social credits’, which were aimed at employees on lower wages who traditionally did not have access to individual bank credit. In addition, the bank has become one of the main partners in PADME (Projet d'Appui au Développement de la Micro-Entreprise – Micro-Enterprise Development Support Project), which is today one of the leaders in the sector: it put part of its network at the disposal of this project for teller transactions as well as lines of credit refinancing, and then supported the creation of PADME’s own branches and banks through training courses.
The micro-finance project was launched in November 1998 with a pilot phase, which led to the creation of a ‘FINADEV micro-finance department’ within the Financial Bank network. The creation of FINADEV SA on 5 July 2000 opened up new prospects thanks to the constant support of the FINANCIAL group in association with SFI (World Bank Group), Dutch FMO (Dutch overseas aid) and La Fayette Participations (HORUS group).

The capital of 1,000,000,000 CFAF, fully paid up and subscribed in 2001, is divided as follows:

• Financial Bank Benin 25 % ;
• Financial BC holding company 15 %  ;
• SFI 25 % ;
• FMO 25 % ;
• La Fayette Participations 10 %.

FINADEV’s mission is to share in the development of the Benin economy by allowing Benin citizens who do not have access to banks to become responsible for themselves and to flourish through access to credit, thereby contributing to the reduction of poverty in Benin.

Products and customer segments. FINADEV provides several types of customer segments with products adapted to each segment:

Solidarity group lending to informal micro-enterprises these loans are aimed at small traders, particularly female traders established in the main markets in Benin.

The ‘Akwè Klèun’ (small money) credit is granted to small groups (two or three male or female traders) with the payment of a deposit and repayment in three to 12 monthly instalments. The members of the group stand security for the loan jointly and severally. The amount per loan varies between 50,000 and 500,000 CFAF. Proper repayment of loans by a group allows it to increase the amount borrowed on a subsequent occasion.

In order to sustain the development of this customer group, an additional product ‘Akwe Djrémé’ (medium money) has been created, which allows financing of up to 3,000,000 CFAF for periods of up to 12 months, secured by more formal guarantees, if they exist, and life assurance contracts. 

Credit to very small, mostly informal, enterprises: small enterprises do not generally have access to banking services, and even less to credit. These enterprises do not have the size or the guarantees that allow conventional commercial banks to take on the risk. FINADEV BENIN, through a sophisticated approach to risk, can offer short and medium term credits to this kind of enterprise.

Mrs Houessinon is a dressmaker in Cotonou and runs a workshop employing 40 people. Since her first borrowing of 400,000 CFAF (Franc de la Communauté Financière Africaine) in April 2002, she has developed her exports to Central Africa. She calls on FINADEV BENIN when she has orders that require a higher level of advance funding. She has borrowed four times from FINADEV, for a total amount of 3.4 million CFAF.

Loans to groups of public or private sector employees, on low or modest incomes, within the limits of the assignable portion of their salaries. This assistance is usually intended for the purchase of capital equipment or for access to home ownership or refurbishment. The amount granted depends on the size of the assignable portion of wages , and the length of the repayment period. Repayments are deducted from salaries.

Individual loans  to wage or salary earners and civil or public servants (mainly intended for household equipment), distributed either directly or through the partnership with the Benin post office group. In this way FINADEV BENIN can potentially reach a significant proportion of the Benin population.

Schooling loans  to enable all customers, without distinction, to provide, if only in part, for the new school year for their children.

Loans to rural and suburban groups of men and/or women, whose members conduct activities that collectively or individually generate incomes, and who themselves provide security for the repayment of the loan. The amount per loan varies between 20,000 and 1,000,000 CFAF.

Business. FINADEV BENIN operates through a network of eight branches located in the main cities: four in Cotonou, one in Porto Novo, one in Lokossa, one in Parakou and one in Natitingou.

As at 31/12/2005, it had 76 employees, including 44 in the branch network.

As at 31/12/05, during a period of economic recession, FINADEV BENIN had credits outstanding worth 5.5 billion CFAF being used by some 15,000 customers. This makes it a major participant in the micro-finance sector in Benin.

Site internet FINADEV BENIN : http://www.finadev.org/

Mrs Jeannette Houansou is a ready-to-wear retailer. She has been a customer of FINADEV BENIN since December 2000, when she received her first loan of 200,000 CFAF. She has borrowed from FINADEV BENIN 11 times for a total amount of 7.9 million CFAF, which has allowed her to grow her business significantly.