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CEMAC: BEAC suggests a reform of legal framework to spur development of mobile microcredits

CEMAC: BEAC suggests a reform of legal framework to spur development of mobile microcredits
  • Comments   -   Wednesday, 27 October 2021 12:46

(Business in Cameroon) - In its recent report on the state of electronic payments in the CEMAC region in 2020, the Bank of Central African States (BEAC) points out that mobile money operators are yet to include microloans in the range of services they offer. 

To address this situation, the central bank suggests that the legal framework in force in the CEMAC region needs to be streamlined, updated, and amended to spur a secured development of microloan services through payment and microfinance institutions. 

The central bank made no mention of the specific laws to amend or update. It only explained that current laws allow banks, microfinance, and payment institutions to offer up to XAF100,000 loans to mobile money users under specific conditions. 

According to the BEAC, between 2015 and June 2017, a service provider tested microloan services in Congo with moderate success. However, due to a lack of legal framework regulating the service, some loans were not repaid and the project was suspended. 

Nevertheless, without mentioning names, the Central Bank reveals that some payment providers have already announced their plan to grant microloans to mobile money users in the region. "These operations, likely to boost financial inclusion, are expected to start in 2021," we learn.

Up to the fourth quarter of the year, there has been no microloan service and no information regarding the launch of the service this year.  

Pending the launch of the said microloan service, the only things users can currently do with their mobile money wallets are to transfer money, pay for phone, water, electricity, and cable bills or school fees. 

S.A.

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