NEWS WIRE: Cameroon: African Union Wants Politicians to Keep Off From Micro-Finance

Source: All Africa.

Original news wire available here.

Cameroon, August 28 – The African Union (AU) has issued a stern warning that politicians should steer clear from the micro-finance sector. The warning was issued at a two-day AU Commission meeting recently in Dakar, Senegal, to elaborate a roadmap for the development of micro-finance in Africa. Top amongst the 16 recommendations that were arrived at, was the warning that, “political interference in the micro-finance business sector be totally eliminated.”

According to participants drawn from 17 African countries who attended the workshop, political leaders or those who declare their active participation in politics be it in government or opposition, are bad economists.

Speaking to The Post, a participant from Cameroon, George K. Geh, Board Delegate of USA Credit Ltd., said if the African Union Commission decided to decry political interference in micro-finance sector, it is because those who take active part in politics in Africa have ruined most micro-finance institutions and their open participation have even scared potential members.

Other recommendations included emphasis on training and capacity building of micro-finance staff and that micro-finance institution should be run along business lines. Due to the fact that micro-lenders are generally interested in profit and not socio-economic growth, AU Commission members saw the need of consumer protection.

Apart from recommending that AU should lobby member states to integrate micro-finance into the financial sector, the AU Commission members decided that since micro-finance institutions do not have the capacity to deal with competition, there is need for the AU to help build capacity to enable them to compete effectively.

It was also resolved that the roadmap for the development of micro-finance in Africa should show an assessment of the impact of micro-finance on a regional basis. It was equally resolved that the AU should encourage member states to promote Public-Private Partnerships, PPPs, especially in the area of infrastructure development and for the road map to address women’s needs specifically.

Governments were urged to provide incentives to micro-finance institutions to operate in rural areas. However, AU Commission members noted that even though micro-finance can contribute significantly to economic growth and development, it is not a panacea for all Africa’s problems.

As such, the members recognised the fact that micro-finance cannot, thus be discussed in isolation. That is why related issues in connection to other challenges such as land reforms, access to national resources and ownership issues featured.

While African governments pursue liberalization policies, member states were told to double their efforts to encourage local investors to participate in the micro-finance sector. Addressing participants at the Dakar summit, the Director of Economic Affairs, African Union Commission, Dr. Rene N’Guettia Kouassi, thanked the Senegalese authorities for their interest in resolving the problem of funding development on the continent and stressed on the importance and key role micro-finance institutions play in the fight against poverty and sufferings.

On behalf of the Senegalese Minister of Small and Medium Enterprises and Microfinance, Boubacar Traore, commended the process initiated by the AU Commission within the framework of the vast field of micro-finance, which to him was perfectly in line with the dynamism imprinted by taking into account the concerns of the poorest people.


He pointed out that the meeting was an opportunity to lend support to the international community, which was committed to reducing by half, the poverty in the world by 2015. He laid emphasis on the reconciliation of the dual economic and social mission of micro-finance by taking into account the distribution of roles and responsibilities and the observance of the principles and good practices obtaining in the sector.

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