MICROCAPITAL BRIEF: 33 Microfinance Institutions Close Down in Cameroon

Thirty-three microfinance institutions (MFIs) have been forced to close down in Cameroon since 2012 due to reported “fraud” and disobedience of the “defined rules” of procedure [1]. Cameroon’s Minister of Finance, Alamine Ousmane Mey, has revoked the licenses of the 33 institutions following the Ministry of Finance’s decision to crack down on illegal operations of microfinance institutions in 2010. The ministry concluded its investigation of reported questionable practices among MFIs in 2012 and recently published a list of organizations that have since been closed down [1]. Sources in the ministry reportedly informed Cameroon Tribune, a government-owned newspaper, that another list of more than 30 MFIs will be released very soon.

It is reported that many of the suspended institutions on the list closed years ago, due to dubious practices. The concern of the clients of suspended institutions, as well as the retribution facing shareholders and managers of the affected institutions, are issues that reportedly linger as the effects of the crackdown. An unnamed source has commented on the need for regulation to fix the outstanding problems in the microfinance industry: “The Ministry is aware of deficiencies in the requirements for entry into the profession, especially [the management]. This is why it has proposed to strengthen the [qualifying measures] for access to the profession of microfinance.”

As of December 2011, there were 645 operational MFIs in Cameroon, employing roughly 16,200 people and serving approximately 1,510,000 clients.

By Anesa Kratovac, Research Associate

Additional Sources and Resources:

[1] Business in Cameroon Website Article, July 30, 2013, “33 MFIs Closed,” http://www.businessincameroon.com/finance/1907-4191-33-mfis-closed

[2] MicrofinanceGateway.org Publication, January 1, 2012, “The Microfinance Market of Cameroon,” http://www.microfinancegateway.org/gm/document-1.9.57347/The%20Microfinance%20Market%20of%20Cameroon.docxFinal.docxfinal2012.pdf

MicroCapital.org Article, July 27, 2013, “MICROCAPITAL BRIEF: Government of Cameroon Partners with United Nations Development Program (UNDP), International Fund for Agricultural Development (IFAD), United Nations Capital Development Fund (UNCDF) To Consolidate Microfinance Sector,” https://www.microcapital.org/microcapital-brief-government-of-cameroon-partners-with-united-nations-development-program-undp-international-fund-for-agricultural-development-ifad-united-nations-capital-development-fund-unc/

MicroCapital.org Article, July 18, 2013, “MICROCAPITAL BRIEF: Depositors Withdraw Savings from Microfinance Firms in Kumasi, Ghana amid Lack of Safety Nets for Clients,” https://www.microcapital.org/microcapital-brief-depositors-withdraw-savings-from-microfinance-firms-in-kumasi-ghana-amid-lack-of-safety-nets-for-clients/

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