MICROCAPITAL STORY: Cameroon’s Minister of Finance Proposes Plans to Strengthen Cameroon’s Microfinance Sector

Following a meeting with fellow cabinet members, Cameroon’s Minister of Finance Lazare Menye announced that Cameroon’s microfinance sector must be strengthened, citing key challenges to the sector’s growth and offering potential solutions to these challenges. Menye noted that the microfinance sector must be preserved because microcredit is an effective instrument that suits the socio-cultural context of Cameroon, and fosters the integration of people marginalized by traditional banks into the formal financial sector.

Menye cited two factors that currently impede the expansion of microfinance: tax policies that deter the entry of more MFIs into the market, and poor management and governance of MFIs. To address the tax problem, the minister proposed a feasibility study for implementing a specific tax code for the microfinance sector. To address dubious management practices, the minister advocated establishing greater supervision and control of MFIs by Cameroon’s Ministry of Finance, and proposed intensifying the curriculum of programs that train microfinance operators. It is not clear if private entities or government programs administer such microfinance training programs.

Cameroonian microfinance represents a large portion of the country’s finance sector. According to a 2007 study by the government’s Treasury of Financial and Monetary Cooperation, microfinance in Cameroon makes up over 44% of the financial sector and covers 287 localities. According to the Minister of Finance, the sector serves 520,000 clients in 8 of 10 provinces, with deposits totaling CFA 95 billion (USD 231.9 million) and an aggregate loan portfolio CFA 61 billion (USD 148.9 million).

By Ryan Benson, Research Assistant

Additional Resources:

All Africa: Cameroon: PM Inoni Wants Micro-Finance Institutions Strengthened, June 27, 2008.

All Africa: Cameroon Plans to Frame National Microfinance Strategy, by L. Nyuylime, April 13, 2007. Courtesy Microfinance Gateway.

Post News Online: Experts Say Micro-finance Is Anti-Poverty Drug, by Kini Nsom, October 10, 2005.