A MICROFINANCE HANGOUT.

A Microfinance hang out ? or may be a hang out at a microfinance ??. Yes indeed !!!. A hang out, a brief stay in the microfinance sector or better still call it an adventure into microfinance. It was not an adventure into the unknown though. Good enough I had some basic training in Business Management / Administration from a British institution. So finding myself at a management position in a Microfinance institution was not a fluke. Besides, it was also an adventure in pursuit of a silent passion. A silent but deep passion for development work and sustainable social change; poverty alleviation being the hallmark. It was a worthwhile adventure I must say because I went, I saw and whether or not I conquered is left for the work done and posterity to speak.

The world of Microfinance is that of regulated entities and or financial intermediaries which do not have status of banks or major financial institutions. They carry out loan operations and or saving collections, and offer specific financial services to populations who mainly operate outside the traditional banking channel. Considering the above therefore, microfinance Institutions refer to entities which exercise micro finance activities.
Globally, the Spectacular growth of the Microfinance sector has been fueled not by market forces alone but also by conscious actions of National Government, NGO’s and donors who view microfinance as an effective tool for poverty alleviation. In fact much of the impetus behind this large and increasing support for microfinance hinges on the assumption that its economic and social impacts are significant.

The Micro-finance Sector in my Country Cameroon is a steadily growing one with also an increase Government Interest and Participation. The history of Micro-finance in this country officially dates as far as 1990, with law No. 90/053 of 19/12/1990 relating to the liberalization or creation of associations and law No. 92/006 of 14/08/1992 on Cooperative Societies and Common Initiative Groups. The Prime Ministerial Decree No. 98/300/PM of September 1998 fixes the modalities for the exercise of activities of Savings and Loan Cooperative Societies, while Decree No. 2001/023/PM of 29/01/2001 modifies certain dispositions of the Decree of 1998.
In April 2001, Government of Cameroon through the office of the Prime Minister declares the document on the National Politics for the promotion and consolidation of Micro-finance. By this declaration, Government not only made public her strategy to this effect, but also is determined beside the classic banking sector, to facilitate the development of financial services by creating a favorable  and  enabling environment. To further strengthen and coordinate activities in the Micro-finance Sector, Government adopted COBAC ( French acronym for Banking Commission of Central African States ) Regulation No. 01/02/CEMAC/UMAC/COBAC of 13/04/02  relating to the conditions of exercise and control of activities of Micro-finance in the Economic and Monetary Community of Central Africa (CEMAC). By this regulation, micro-finance in the country and CEMAC Zone became categorized between category 1 to 3 according to their specificities.

Micro-finance represents a large portion of Cameroon’s Finance Sector, of up to 44% and covers 287 localities. It serves about 520.000 customers/clients in 8 of the country’s 10 Provinces(now Regions) with deposits of over 95 billion francs cfa (USD 231.9 millions) and an aggregate loan portfolio of francs cfa 61 billion (USD 148.9 million). This is indeed a vibrant Sector.
In the framework of the implementation of her policy for the fight against poverty, Government views Micro credit as an effective instrument. She therefore intends to institutionalize, organize and reinforce the actual system of Micro-finance as suitable to the country’s socio-economic context and also fosters the integration into the formal financial sector the population which cannot comply with the services of the classic banking system.

How effective is the microfinance instrument in fighting poverty ? or better still rural poverty ? The expected answer here takes me back to my adventure or hang out days in this sector. My adventure drive took me to PROVIDENCE  SAVINGS  AND LOAN  LTD -  a microfinance institution ( MFI ). It is a striving microfinance institution, fully registered in Cameroon. It is based in Limbe the Anglophone Southwest Region of Cameroon. I was there at the beginning of this institution. We pulled resources together, we formulated policy objective, we set the vision/mission and channeled the purpose. We network our ideas and some people bought it over. We were a handful of men, women and community based organization driven with passion to set up an institution which became -  PROVIDENCE SAVINGS AND LOAN COOPERATIVE ( PRESLCO) LTD. So I got at the helm of affairs in this institution. Not because I had training in Business Management but mainly because I was passionate about the formation, I was there at the beginning, I understood the vision and could drive the vision better.

At PRELSCO LTD, we carried out activities and programs; but most striking to me was the Rural Micro Savings and Credit Scheme ( RUMISACS ). This an outreach to the rural communities. It is innovative -  community focused and participatory,  socio-economically impacted lives. It is a development tool we created. By it we provided financial services with social dimension according to dire needs. At inception of this program, we set up a network of cashpost or micro cash centers in some rural communities and suburbs of Limbe. We operated this through Mobile Cash Pick Agents. The rural people were encouraged to save, micro loans  also given to them for productive purposes - carrying out income generating activities. It is not surprising that multiple micro economic and income generating activities are springing up in the rural areas we operated this program. Self reliance has been established and community welbeing  instituted in the process. At least minimum commercial presence has also been attracted in the areas which has prompted local Government authorities to respond with some rural infrastructure development like farm to market roads and electricity.

Obviously there are other microfinance establishments just like PRESLCO LTD and even more than it. But if they also are in the same line of activities like PRESLCO or doing even more; then one can say with some measure of certainty that Microfinance has been effective in fighting rural poverty.


                                            BY   :   GODYCREATIVE