According to World Bank estimates, in 2003 Burkina Faso had a population of 12.1 million people, 50.4% of whom were between the ages of 15 and 64. In 1998, 45% of Burkina Faso’s population was living on less than $1 per day and 81% below $2 per day based on the World Bank World Development Indicators. The 2003 PPP-adjusted GDP per capita was $1,110, a 5.81% decrease from $1,174 in 2002. In 2003, Burkina Faso received $40.9 million in remittances according to the World Bank. The World Bank and the OECD estimate that Burkina Faso’s M2/GDP ratio was 0.18 in 2003. Burkina Faso received $11.2 million FDI net inflow and $451 million in foreign aid and development assistance in 2003. According to the UN, the GINI coefficient for Burkina Faso in 1998 was 0.48. The unemployment rate for Burkina Faso is unavailable in the World Bank database.
Burkina Faso has been identified as one of the 49 Least Developed Countries (LDC) by the UN.
Burkina Faso shares its currency, the CFA franc, with other members of the West Africa Monetary Union (UEMOA). On January 1st 1999 the CFA franc became tied to the euro at a fixed exchange rate of CFA655.96:€1, and ended its relationship with the French franc which had been set at CFA100:FF1. The average exchange rate was CFA697.0:US$1 in 2002, CFA581.2:US$1 in 2003 and CFA528.3:US$1 in 2004, according to the Economist Intelligence Unit (EIU).
Burkina Faso has not planned to participate in the Financial Sector Assessment Program (FSAP) of the World Bank and IMF.
The World Bank uses several indicators to assess the business environment of a country. To launch a business in Burkina Faso, entrepreneurs are required to go through 12 steps at a cost of 152.8% of GNI per capita in 2004. Registering property requires 8 steps. It costs 22.2% of GNI per capita to create collaterals. Burkina Faso scores 1 on a scale from 0 to 7 on the Disclosure Index, which measures government protection of investors and business owners.
According to the World Bank, the public credit registry covers 2 borrowers per 1000 adults, and there is no private credit coverage. In terms of the World Bank’s Credit Information Index, Burkina Faso scores a 2 on a scale from 0 to 6.
Regulatory and Legal Environment of Burkina Faso
According to the World Bank, it takes 41 procedures and 458 days from the time a plaintiff files a lawsuit to when he or she is actually compensated. The cost of enforcing contracts in terms of legal and court fees amounts to 92.5% of debt value. Filing bankruptcy takes 4.0 years at a cost of 8% of estate value. The recovery rate for creditors in Burkina Faso is $0.06 per $1 USD.
The monetary policy of Burkina Faso is largely determined by UEMOA. According to Patrick Meagher of the IRIS center at University of Maryland, members of UEMOA agreed to a common approach in the regulatory framework for MFIs, which was developed under the aegis of the Central Bank of West African States (BCEAO). This initiative, the Projet d’Appui a la Reglementation sur les Mutuelles d’Epargne et de Credit (PARMEC), uses a mutualist or cooperative model. Credit institutions can face sanctions up to and including criminal sentences if they do not conform to PARMEC standards, register under the banking laws, conclude a special agreement with the Ministry of Finance, or qualify for the exclusion of informals. NGO microfinance programs, among others, would therefore run afoul of the law. The mutuals designated in the PARMEC law, along with their unions, federations, etc. are subject to the regulatory authority of BCEAO and to the supervision and prior approval authority of the Ministry of Finance. The law requires compliance with local usury statutes, which allow interest rates in credit programs to rise from 13 to 27 percent.
Microfinance Institutions (MFIs) and Commercial Banks’ Involvement in Burkina Faso
According to the FIRST Initiative, Burkina Faso’s banking sector consists of eight commercial banks as of January 2004. The financial system of Burkina Faso is integrated on a regional level, with the BCEAO supervising the banking sector and finance institutions. A series of reforms that occurred in the 1990's included limiting state ownership in banking institutions and privatization. Despite these measures, however, intermediation remains low. By 2003, all major banks had varying degrees of foreign ownership, primarily by France and other African nations.
The FIRST Initiative also states that microfinance is a major part of the financial sector. In 2003, the sector was mostly comprised of three types of institutions: 1) loan and deposit institutions, 2) a network of credit unions and deposit institutions, and 3) rural credit and women’s microfinance agencies. A number of organizations are supporting microfinance efforts in the country including UNDP, GTZ, Catholic Relief Services, and CIDA. UNDP’s program is provided by the Réseau de Caisses Populaires de Burkina in more than 350 villages and has more than 19,000 clients.
According to the Programme de renforcement des capacités en microfinance pour l'Afrique francophone (CAPAF), there is a microfinance network in Burkina Faso. Based in the capital, Ouagadougou, the trade association of the Institutions of Microfinance of Burkina Faso (APIM-BF) was founded in August 2002 to promote microfinance in Burkina Faso.
Activities of Burkina Faso’s National Committee Burkina Faso’s National Committee was established in April 2005. Its members include representatives from all sectors including the government, central bank, bank associations, nonprofits/NGOs, private sector, multilateral agencies and academia.
Its planned activities for the year include a national press conference, forum discussions, and a one-week microfinance conference. The Committee is launching a public awareness campaign, which includes brochures, five radio programs, and publicity in the International Journal of Microcredit. It is holding a university competition on microfinance and is researching microfinance around the world. The UN Volunteers program is promoting education and training for youth and their parents, helping them settle small-scale activities through microfinance in order to reduce poverty and reintegrate families with economic and social systems.
Bibliography FIRST Initiative
Strengthening Financial Sectors Burkina Faso, Accessed June 7, 2005
Deutsche Gesellschaft für Technische Zusammenarbeit GmbH
Accessed June 8, 2005,
International Monetary Fund
International Financial Statistics and Balance of Payments Databases, May 21, 2005,
Organisation for Economic Co-operation and Development
Burkina Faso Aid at a Glance Chart, accessed June 8m 2005.
Microfinance Regulation in Developing Countries:A Comparative Review of Current Practice, October 2002, accessed on June 11, 2005,
< http://www.intercooperation.ch/finance/download/divers/iris-comparision-between-countries.pdf >
Programme de renforcement des capacités en microfinance pour l'Afrique francophone