Senegal enacted Law No. 2025-04 of 19 February 2025 on the regulation of microfinance, transposing into national law the new uniform microfinance law adopted within the West African Monetary Union (UMOA). The law applies in Senegal; the uniform law is incorporated into national legislation by each member state of the union.
The National Assembly adopted the microfinance bill unanimously earlier in February, together with a separate bill on banking regulation. Both texts were presented to lawmakers by Cheikh Diba, Senegal's Minister of Finance and Budget.
FROM SFDS TO MICROFINANCE INSTITUTIONS
The law replaces the previous framework for decentralised financial systems (SFDs), which are now designated microfinance institutions. It sets stricter requirements for managers, directors and oversight bodies on integrity, competence and responsibility, and strengthens rules on conflicts of interest and limits on the number of mandates.
Institutions are required to give clients better information on fees, interest rates and contractual obligations. Supervision is to be proportionate to an institution's size and risk exposure rather than applied uniformly, and the text addresses mobile payments, partnerships with fintech companies and cyber-security risks.
GOVERNANCE AND COST OF CREDIT
Presenting the bill, Diba said the law brought innovations including stronger governance of microfinance institutions, clearer roles and responsibilities for supervisory authorities, application of the principle of proportionality, rationalisation of legal forms and protection of cooperative members. Lawmakers raised concerns over governance in the sector and the level of interest rates charged by microfinance institutions. Diba said work was under way to give microfinance institutions access to the central bank's financing windows in order to lower the cost of credit.
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