Accreditations of 28 microfinance institutions withdrawn

Cameroon’s Minister of Finance (MINFI), Alamine Ousmane Mey, has decided to withdraw the accreditation for 28 microfinance institutions (MFIs) which are out of business, payment defaults or inability to meet normal operating conditions.

Nearly 80 percent of those outfits are established in Douala and Yaounde, the country’s economic and political capitals respectively.

Last February, promoters of 84 non-licensed MFIs were invited to cease operations immediately and shut down.

These illegal institutions have a tendency to resist despite regulations and other sanctions by the authorities.

In fact, in mid-July 2013, MINFI closed 34 EMFs either over expired licenses, termination of payments or cessation of activities.

In general, their promoters are reproached for their shady and adventurist nature.

At the end of June 2011, out of about 480 licensed MFIs, nearly fifty were affected by liquidation, cessation of activities, recovery and under temporary administration.

Regarding standards of prudence, out of 50 MFIs samples, only half, according to MINFI, met liquidity, risk provision and assets provision ratios while a dozen of them had satisfactory capital.

According to official statistics, in late 2010, deposits by these institutions amounted to CFA 300 billion with a loan risk tantamount to CFA 200 billion, covering approximately 1.2 million customers during the period.