Market System Approach in the Benin

Purpose of the Market Systems Approach

The Market Systems Approach is a coordinated, harmonized framework aimed at strengthening responsible inclusive finance. It brings together all the important stakeholders in a market: regulators, financial service providers, investors, professional associations, technical assistance networks (e.g., the SEPM Pros Network), and consumer groups to co-create and implement common standards and practices.

Its core objective is to ensure that:

  • Client Protection (CP) Standards,
  • Environmental, Social, and Governance (ESG) risk management, and
  • Social and Environmental Performance Management (SEPM) Standards

…are widely understood, tailored to national realities, and put into practice.

The approach is specifically designed to avoid fragmented efforts, reduce overlap, and strengthen coherence by engaging all relevant actors in the ecosystem simultaneously.

Learn more on our approach

Implementation in Benin

Cerise+SPTF has been engaged in Benin for many years, supporting financial service providers, developing the capacity of local experts (SEPM Pros), co-financing audits and improvement initiatives via the Responsible Inclusive Finance Facility (RIFF), and collaborating with impact investors such as Regmifa, Oikocredit, and Incofin.

Today, a systematic and structured approach is being implemented through the following complementary initiatives:

1. ESG Project with 12 financial service providers (“decentralized financial system” in Benin)
  • Funded by DAI/USAID, focusing on strengthening ESG practices,
  • delivers audits, training, and technical assistance using SPI tools (ESG Risk) from Cerise+SPTF,
  • designed to raise ESG awareness and improve risk management practices starting with developing environmental strategies and policies.
2. Capacity Building for National Supervisory Authority (Agence Nationale de Supervision des Systèmes Financiers DÊcentralisÊs - ANSSFD)
  • An intensive training program for 15 ANSSFD inspectors,
  • including e-learning, coaching, and on-site audit accompaniment,
  • focused on Client Protection and Social & Environmental Performance Management,
  • tailored to meet the expectations and responsibilities of ANSSFD to use SPI tools (ALINUS), framework and adapted guidance to evaluate / report whether financial service providers are in compliance with regulation.
3. Development of a National SEPM Standards Framework
  • Identifies and formalizes common social and environmental standards specific to Benin:
    • Map the Universal Standards with national and regional regulation, in particular the recent Loi N°2025-14 on Microfinance and the Labor Law,
    • Consider how the Universal Standards might help to address ESG and environmental issues as opportunities to be pushed in the inclusive finance sector.
  • Enables national-level benchmarking, guidance, and evaluation.
  • Aligns local efforts with international best practices while remaining locally relevant.

Support for Standard Setting and Supervision Tools

As part of a deeper systemic shift, efforts are underway to check alignment of international standards with national regulation and supervisory practice.

✔️ Mapping and Alignment Work (Project 3 - P3)
  • Mapping national regulation to the Universal Standards for SEPM and Client Protection.
  • Aligning the National Financial Inclusion Strategy with SEPM and CP, including identifying needs for capacity building and tool development.
  • Analyzing local frameworks, including labor laws, environmental standards, and consumer protection norms.
  • Supporting regulatory strategy on SEPM and CP for ANSSFD using the mapped standards for supervision, support and reporting on social and environmental regulation.
    • For example, related to client protection and included in the recent microfinance law.
  • Organizing stakeholder workshops to develop action plans for standard incorporation.
✔️ Development of Assessment and Monitoring Tools (Planned Project 4 - P4)
  • Goal: Create regulatory-aligned tools for monitoring compliance with SEPM and CP norms.
  • Tools could include:
    • Existing SPI Online suite: ESG Risk, ALINUS, CP Commit,
    • Or a new tool: ALRUS (Aligning Regulator Monitoring with the Universal Standards) – specifically designed for supervisors.
  • The central hub (Cerise+SPTF) leads tool development, while a regional hub supports local adaptation and deployment.
  • Benin is a potential pilot site for ALRUS development and testing.

Added Value of the Approach

With over two decades of experience, Cerise+SPTF brings:

  • Field-tested tools and methodologies,
  • Ongoing technical assistance and capacity-building,
  • A collaborative, systems-level perspective that aligns local efforts with international benchmarks.

By working across actors — from financial service providers to regulators — this approach supports systemic change that improves financial sector integrity and impact, particularly for vulnerable populations in Benin. In conjunction with other projects in Benin, this enables a robust systemic approach that addresses Benin's specific challenges while aligning with international standards and best practices for vulnerable populations.

“The last few months have accelerated the integration of SEPM and Client Protection principles in Benin’s financial sector with innovative and revolutionary projects. With these projects, we are witnessing the establishment of the three pillars necessary for building a responsible inclusive finance sector in Benin : regulation and supervision for customer protection, standards and codes of conduct on Client Protection Standards for the sector, and capacity building and financial literacy for customers. The common SEPM framework, currently being developed, will create specific standards and codes of conduct for the financial sector in Benin. More work remains to be done on customer financial literacy and capacity. I believe that with all these projects, we are on the right track to achieve this..”

Fonton Sylvestre HONVOU, SEPM Professional based in Benin.

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