Doing business in Benin: leaving the informal economy, financing growth, structuring support

The finding comes up in almost every study: in Benin, more than 80% of economic units operate in the informal sector. A government note covering 2016-2021 estimated informal jobs at 82% of jobs created — nearly one million out of a total of about 1.2 million. For small traders, craftspeople and sole traders, this situation limits access to credit, social protection and public procurement, and holds back the growth of businesses that could scale up with the right support.

It is worth measuring what this figure implies. An economy growing at 7% a year, but where four units out of five remain outside the formal sphere, produces growth a large part of which escapes taxation, bank lending and statistics. Above all, it produces capped businesses: without financial statements, without a trade register entry, without a banking history, a business can neither borrow, nor bid for a public contract, nor sign a supply contract with a manufacturer who requires compliant invoices. Informality is not just lost revenue for the state; it is a glass ceiling for the entrepreneur.

A financing architecture that is getting denser