Microfinance in Cameroon: Regulatory Framework and Licensing Procedures

Microfinance plays a central role in financial inclusion in Cameroon. It allows populations often excluded from the traditional banking system to access credit, savings, and financial assistance services tailored to their needs. The sector is governed by rigorous regulations to ensure stability, transparency, and the protection of savers.

It is defined as an activity carried out by approved entities that do not have the status of a bank or “financial institution — Microfinance Institutions (MFIs). These structures habitually engage in credit operations and/or savings collection, and offer specific financial services, primarily to populations operating outside the traditional banking system.”

In Cameroon, microfinance activity is governed by the COBAC Regulation No. 01/17/CEMAC/UMAC/COBAC of September 27, 2017, which sets the conditions for the exercise and control of this activity in the CEMAC zone. This text applies to MFIs, their governance bodies, as well as external auditors.

Procedures for Processing Licensing Applications for MFIs, Their Executives, and Statutory Auditors

The exercise of microfinance activity is subject to obtaining approval issued by the monetary authority (in Cameroon, the Ministry of Finance), after a favorable opinion from the Banking Commission of Central Africa (COBAC).

▪ Submission and Transmission of Applications

Licensing applications are submitted to the monetary authority against acknowledgment of receipt or discharge. A copy of the application, accompanied by the acknowledgment of receipt or discharge, is transmitted to COBAC for information.

▪ Institutional Process

The processing of applications follows an institutional shuttle (MINFI–COBAC–COBAC–MINFI) established within regulatory deadlines, which may be suspended if necessary. An MFI Approval Committee sits within the Ministry of Finance, under the chairmanship of the Director General of the Treasury, Financial and Monetary Cooperation (DGTCFM).

Applications are reviewed by this committee, notably composed of:

• Representatives of the professional sector;
• Representatives of an organization supporting MFI development;
• Heads of the Microfinance Division;
• Representative of the Legal Affairs Division;
• Representative of the National Economic and Financial Committee (CNEF, formerly CNC).

▪ Analysis by COBAC

Applications deemed complete by the committee are transmitted to COBAC for a favorable opinion. COBAC’s analysis notably covers:

• The institution’s governance structure;
• The professional competencies of the proposed executives;
• The qualifications of the appointed statutory auditors, in relation to the size and nature of the institution’s activities;
• The integrity, absence of conflicts of interest, incompatibilities, or prohibitions affecting the individuals involved.

▪ Approval Decision

Approval is granted, where applicable, by Order of the monetary authority. A copy of the order is transmitted to:

• The applicant;
• COBAC;
• The National Directorate of BEAC;
• The CNEF.

Required Documents for Licensing Applications

The approval procedure is governed by the COBAC MFI Regulation R-2017/05, which specifies the conditions and procedures for the approval of MFIs, their executives, and statutory auditors.

➤ the Licensing Application File Must Specify:

• The requested category: 1st, 2nd, or 3rd category;
• Information to be provided:
  
  • Regarding the institution itself;
  • Regarding cooperators or shareholders (natural or legal persons);
  • Regarding the members of the board of directors;
  • Regarding the executives;
  • Regarding the statutory auditors.