UMOA: the rate of deterioration of the microfinance portfolio decreases to 7.5% by the end of 2025.

The quality of the credit portfolio of microfinance institutions in the West African Economic and Monetary Union improved in 2025. By the end of December, the gross deterioration rate was 7.5%, down from 8.9% during the same period in 2024, according to data published by the Central Bank of West African States.

This development represents a decline of 1.4 percentage points over one year. In the fourth quarter alone, the improvement is more pronounced, with the rate dropping from 10.3% at the end of September to 7.5% three months later.

The gross deterioration rate measures the share of overdue loans in the total amount of credits granted. Its decrease thus reflects a relative decline in loans facing delays or repayment difficulties.

Overdue loans decrease by 68.2 billion FCFA

The improvement observed in the last quarter is mainly explained by the reduction in overdue loans. Their outstanding balance decreased from 287.2 billion FCFA in September to 219 billion FCFA in December 2025.

The decrease thus reaches 68.2 billion FCFA in three months, or 23.7%. This occurs while the total outstanding credit granted by microfinance institutions increased by 5.5% during the quarter, reaching 2,937.2 billion FCFA. Over the year, the distributed credits grew by 9%.

Despite this favorable evolution, the rate of 7.5% remains 4.5 percentage points above the generally accepted norm of 3% in the microfinance sector. Controlling credit risk remains one of the main challenges for the institutions in the Union.

A high proportion of overdue loans can weigh on the results of the establishments, increase their provisioning needs, and reduce their capacity to grant new financing to households, traders, and small businesses.

By the end of December 2025, UMOA had 524 microfinance institutions, down from 527 three months earlier. They served more than 20.37 million clients across 4,838 service points in the eight member states of the Union. The number of beneficiaries increased by 6.6% year-on-year.

Deposits collected by the sector reached 2,793.1 billion FCFA, up 13.6% year-on-year. BCEAO also notes the continued growth in account openings, savings collection, and credit granting.

The published figures are based on estimates derived from data from 190 institutions representing over 90% of deposit and credit operations in the decentralized finance sector within UMOA.