The Impact of Micro-Finance institution (MFI) on the Cameroon economy

Sunday, December 4, 2022

The Impact of Micro-Finance institution (MFI) on the Cameroon economy 

Department: Banking and Finance

No of Pages: 36

Project Code: BFN11

References: Yes

Cost: 5,000XAF Cameroonian

 : $15 for International students

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Cameroon is a third world or developing country and like most developing countries agriculture is its main activity and it employs like 80% of the working population and also contributes about 75% of the GDP of Cameroon.


Due to the under developed nature of Cameroon a majority of the population cannot be served by commercial banks due survey. With this short coming to the poor the idea of micro finance was introduced in Cameroon.


Microfinance is not a new concept but back in the 19th century, money lenders were informally performing the role of now formal financial institutions. The informal financial institutions constitute; Cooperative credit unions, state owned banks and social venture capital funds.


These institutions are said to provide savings and credit services for small and medium size businesses in developing countries and it is known that such businesses are likely to fail (Maloney 2003).


The first microfinance was founded by Muhammed Yunus in Bangladesh in 1976 known as Grameen bank. Microfinance in Cameroon originated around the 1980s due to severe economic and banking crisis.


Microfinance renders both financial and non-financial services; financial services include micro-insurance and money transfer; non-financial services includes training, advising and counseling. Microfinance in Cameroon takes several forms for example self organized groups, cooperatives, non-governmental organizations (NGOs).


All microfinance have as their main objective to provide financial services to the poor who have been excluded to conventional banking (commercial banks).As a result this empowers the poor by giving them autonomy.


Since 1992, 46 billion FCFA has been given as loans to more than 650000 people by 81 MFIs and of this amount 40% was given to boost the production storage and marketing in Agro pastoral activities (Wikipedia 2011).


Majority of the population deals with MFIs than commercial banks and it has about 520000 customers with deposits of 95 billion FCFA   (www.camccul.orgaboutus,2007).  Some commercial banks in Cameroon includes Credit Communataire d’Afrique (CCA), UNICS, Community Credit Company(CCC) and Dominion Finance.



Cameroon as a third world country falls under the category of heavy indebted poor countries (HIPC). As such majority of the population lives below the poverty line thus making it difficult for these persons to be served by commercial banks.



With these problems at hand, microfinance institutions have a very important role to play. MFIs are out for poverty alleviation; that is try to serve the poor and those excluded from commercial bank conventional banking.


Therefore, given that micro-finances are out for poverty alleviation and majority of the population of Cameroon is poor MFI have a very sensitive role to play in Cameroon. The problem here is to know if microfinance will be able to adequately serve the poor population in Cameroon.


The topic is aimed at providing evidence that MFIs are important arm in alleviating poverty in Cameroon. However, this research is aimed at providing answers to the following research questions. To what extend does loans (credit) provided by microfinance institution affect the economy of Cameroon?


The main objective of this study is to examine the impact of microfinance institutions on the Cameroon economy. The specific objectives include:

  • Identifying the problems facing the Cameroon economy.
  • To examine the impact of Microfinance credit in the Cameroon economy.
  • Making necessary recommendations based on the findings.

Check out: Banking and Finance Project Topics with Materials