The Informal Sector and Microfinance Institutions in West Africa
This book examines the dynamics and constraints faced by informal sectors in 12 West African countries -Burkina Faso, Cape Verde, Chad, the Gambia, Guinea, Guinea-Bissau, Mali, Mauritania, Niger, Sao Tome and Principe, Senegal, and Sierra Leone. It studies nine microfinance companies for their suitability for partnership with the World Bank.
The book sums up major findings of the country profiles and of the institutional case studies, and lays out a series of options for World Bank involvement. It finds that:
- Informal sectors are very large and appear to be growing rapidly, accounting for one-third to three-quarters of total employment in most countries;
- The majority of informal activity is rural and agriculture-related;
- Women, particularly poor women, are major participants in all informal sectors;
- Low-income entrepreneurs rely mainly on family and friends, moneylenders and trade creditors for savings credit;
- A few access financial services from donor-supported non governmental organizations and credit unions, but virtually none interact with banks;
- Microenterprise assistance programs are scattered unevenly across the region: there are many in some countries and few in others.
The book concludes that the World Bank should categorize microfinance delivery as a financial sector operation, and help the microfinance institutions under consideration to increase their outreach and move toward sustainability.
[Adapted from authors' abstract]
