Microfinance sector in turmoil

After microfinance establishments opening without approval, a hundred of which the Minister of Finance ordered closed last year, now there are licenced microfinance companies that are engaging in activity unrelated to “the category” for which they were licenced.

A warning issued by the Ministry of Finance, Alamine Ousmane Mey, reveals that “some category 1 microfinance establishments are engaging in savings collection operations and loan granting with non-member third parties; activities that are regulated to be exclusively for category 2 microfinance establishments. And in these operations, some others are having people make social contributions as if they are fees without explaining to them the real nature of these initial charges.”

500 microfinance establishments are operating in Cameroon. They officially represent 15% of the loans granted in the national financial sector and are improving the country’s banking rate because of their presence in rural areas.