(Business in Cameroon) - Minister of Finance Louis Paul Motazé recently published a list of the 415 microfinance institutions approved in Cameroon as of December 31, 2020. In an official statement, the official explains that the move is to inform residents of the need to get into a business relationship with only duly approved microfinance institutions because, in Cameroon, it is prohibited to offer microfinance services without licenses.
As a matter of fact, in the country, some microfinance institutions are still operating without getting the required authorizations from the Ministry of Finance, which is the national monetary authority. Sometimes, those unlicensed institutions are just created to collect clients’ savings and flee with it leaving distraught clients behind.
The official’s list is aimed at sensitizing the population; most of them prefer microfinance institutions to classic banks because of the flexible account opening conditions at those institutions, which are sort of micro-banks. Another reason microfinance institutions are more popular than classic banks is that microfinance institutions are present in rural areas usually shunned by commercial banks.
According to the Ministry of Finance, in 2019, the microfinance institutions approved in Cameroon granted XAF839.14 billion of loans to economic agents. In relative value, it was 22.90% of the overall bank loans granted during the period.