Role of Financial Institutions in the Promotion of Micro & Small Enterprises in Burkina Faso: Evaluation and Analysis of Funds Flow

The paper analyses the supply of credit and financial services through formal channels, and estimates to what degree the services on offer meet demand.

Donor organizations have tried various means of promoting micro and small enterprises (MSEs) via credit, training, technical assistance and improvement of regulatory framework within which MSEs operate. The paper states that the only type of assistance that has shown sustainable impact is credit.  It examines type of credit and other financial services provided by financial institutions to MSEs. It concludes that:

• There is significant potential demand for short term credit by microenterprises, which are hardly served by formal channels;
• Availability of financial services to MSEs should be increased;
• New types of intermediary institutions that are adapted to financing MSEs, and ensure coordination among donors, banks, and other intermediaries, should be developed;
• Linkages between channels should be increased;
• Institutional sustainability and profitability should be established as the major objectives of all credit initiatives;