MAIN Seminar Theme No. 5: Optimizing Security - Security in the Face of Uncertainties

This case study was presented by ASPRODEB at the MAIN Seminar workshop "The levers of financial sustainability". The study concentrates on the Government of Senegal's efforts to help the rural communities to ease their heavy debt. With the creation of Caisse Nationale de Crédit Agricole du Sénégal (CNCAS), there was a plan to introduce a mechanism for loan security. This mechanism was to include two funds:

• The guarantee fund with the aim of guaranteeing to the banks and other financial institutions the repayment of a share of the outstanding amount of loans that the banks grant to the producers;
• The disaster fund to come to the assistance of members of the rural communities, in the event of an officially-declared disaster.

The paper defines the operating rules of the two funds, in particular:

• Administrative rules;
• Management committees as well as the conditions under which the committees meet and deliberate;
• Rules on the use of the funds' resources.

It further lists down some of the limitations of the current system:

• Only State contributions are really effectual, participation of producers raises some problems;
• The texts concerning the rules of procedure of the two funds are still in the draft stage;
• The management of funds does not involve technical departments, producers, etc.

The paper finally raises concerns and makes some recommendations for the future:

• Concerns:
  • The system's current operating arrangements raise the serious question of its sustainability;
  • The repayment track record is not very good.
• Recommendations:
  • The system must be made operational by taking into account the arrangements initially intended;
  • The State should publish the decrees on the creation and operations of the national fund management committees;
  • The rules of procedure of the funds should be adopted.