III.1.3- Evolution of equities
The financial structure of MFIs has strengthened. Indeed, the
equity of the sector rose to about 35%, from 27,511 in 2008 to 42,283 billion
at the end of 2010. It should be noted that the capital structure displayed by
the sector (27,511 billion) represent 19.8% of those commercial banks in
Cameroon at the same date.
The importance of first category of MFIS is not negligible.
CAMCCUL network is the largest settlement funded with shares subscribed and
paid that amount to 7571 billion. It is followed by CCA and ADVANS Cameroon,
which belongs to the second category, which have subscribed and paid up capital
respectively of 3 billion and 2500 billion. Some MFIs of second category are in
the process of important recapitalization, thus it is noted that the CCA in
early 2010 increased its capital to 5 billion FCFA, COMECI launched a program
of action to go to 3 billion FCFA, First Trust follows the same trend with new
entrants in the capital.
Since 2005, commercial banks are increasingly interested in
this sector developed by the MFI, and thus BICEC entered the capital of ACEP,
SGBC created in 2006 with other partners (Horus Finance) ADVANS. Eco Bank has
partnered with ACCION International to launch in early 2010 EB-ACCION
Microfinance Cameroon (EAMF). Apart from these initiatives, we must add those
already underway for over a decade. This is first Afriland First Bank, which in
1992 embarked on the promotion of M and MUFFA, BICEC with CVECA (focus on
refinancing) in the middle 1990s and the Union Bank of Cameroon (UBC) and the
CAMCCUL network since 1999,
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Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
collaboration will be strengthened with the entry of OCEANIC
BANK International shareholding in UBC. Just because these institutions are
good customers for them, profitable and safe, because their risk is spread over
thousands of small loans. In addition, commercial banks in microfinance are an
extension of their business into new markets. Microfinance, which attracts
private capital to those who need it most, opens unprecedented
opportunities.
Several private investors have entered in Cameroon include:
BLUE FIANANCE into CADECI MFI in first category, ECP (first Trust), AFRICAP or
MAURITUS MECENE (The Regional), CORDAID (CECAW) and RABOBANK (CECAW and
MUCEPI).
III.1.4- Profitability of microfinance sector
Mainly due to the poor quality of loan portfolios, the
profitability of Cameroon MFI is generally low and highly dependent, for
structures that are profitable, grants and funding received from the Government
(HIPC and other projects) and / or external donor funding. Thus, despite the
above noted performance, the financial situation of the microfinance sector in
Cameroon is generally troublesome. In general, it appears that independent MFI,
including first category are characterized by fragile financial situations.
Only MFI in a network and those benefiting from the technical assistance of a
regular partner (ADAF case for M), have an acceptable financial situation.
Microfinance institutions in difficulties include: FIFFA,
CICA, EDPS, CPAC, CAMAC. The situation is also worrying for authorized
networks. Of the six networks, two, despite some shortcomings, financial
situation acceptable (CAMCCUL and A3C), both have a marginal activity (CMEC
CMEC West and North), one has not yet reached financial independence (ECSC
CVECA North) and is out of business since 2008.Two microfinance institutions
COFINEST SA and FCIC, respectively, were placed in liquidation (after nearly
three years of provisional administration) and under provisional administration
by COBAC.
Despite this situation as a leader in the sub-region of
Central Africa, the microfinance sector and in this case the supply of
microfinance services has serious shortcomings. For industrial actors, these
failures are generic. First, MFIs in Cameroon are characterized by unequal
distribution of the national territory. One can also observe their high
concentration in the central, Littoral and West regions. MFIs independent grant
a preference to install their seats in urban areas specifically Yaoundé,
Douala and Bafoussam, while networks are much more rural.
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Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
Moreover, the deposits are concentrated among a small number
of MFIs (networks in this case). Then, the expansion of savings is remarkable
but it is accompanied by a low coefficient of transformation of these credit
resources, covering imperfectly financing needs in the short, medium and long
term customer. Access to external financing is very limited due to lack of
suitable guaranteed mechanisms. Finally, intermediation between Bank and MFI is
low as well as dialogue between different stakeholders.
Also, the state has, for the moment, a very insufficient role
in promoting the sector and service offerings in particular, regardless of the
definition of a national strategy for development of the microfinance sector in
the PRSP and the establishment of a sub-department in charge of microfinance in
the Ministry of Finance.
III.2- The concept of informal sector III.2.1-
Definition
The original use of the term informal sector' is
attributed to the economic development model put forward by W. Arthur Lewis,
used to describe employment or livelihood generation primarily within the
developing world. It was used to describe a type of employment that was viewed
as falling outside of the modern industrial sector. An alternative definition
uses job security as the measure of formality, defining participants in the
informal economy as those 'who do not have employment security, work security
and social security.» While both of these definitions imply a lack of
choice or agency in involvement with the informal economy, participation may
also be driven by a wish to avoid regulation or taxation. This may manifest as
unreported employment, hidden from the state for tax, social security or labour
law purposes, but legal in all other aspects.
The term is also useful in describing and accounting for forms
of shelter or living arrangements that are similarly unlawful, unregulated, or
not afforded protection of the state. Informal economy' is
increasingly replacing informal sector' as the preferred descriptor
for this activity.
Informality, both in housing and livelihood generation has
often been seen as a social ill, and described either in terms of what
participant's lack, or wish to avoid. A countervailing view, put forward by
prominent Dutch sociologist Saskia Sassen is that the modern or new
informal' sector is the product and driver of advanced capitalism
and the site of the most entrepreneurial aspects of the urban economy, led by
creative professionals such as artists, architects, designers
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Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
and software developers. While this manifestation of the
informal sector remains largely a feature of developed countries, increasingly
systems are emerging to facilitate similarly qualified people in developing
countries to participate.
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