The players in the sector meet at Gicam to discuss good practices that allow microfinance to be credible with customers and potential investors.
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The fourth edition of the forum of the Initiative for Transparency in the Microfinance Industry (Itimac) has been held since December 6 in Douala. The leaders of Micro Finance Institutions (EMF), the public authorities and the actors of the financial system take part in this meeting placed under the high patronage of the Ministry of Finance.
It is a question of sensitizing the actors on the importance of transparency in the sector. In particular the benefit for EMFs of publishing their information. Itimac actually integrates a vast program of promotion of good practices intended for the social leaders of the microfinance establishments. This program was designed by the company Microfinance Académy, to help the microfinance industry in Central Africa to be more transparent, to professionalize and to be more competitive. This transparency should enable microfinance to avoid fewer sanctions from Cobac and the National Credit Council and to be more credible vis-à-vis donors. Because, according to a study carried out by Micro finance Academy, most investment funds and other financial organizations intervene little in the establishments of micro finance of CEMAC. Despite the efforts of the government and supervisory and regulatory bodies to promote good practices within MFI establishments, investors cite two main reasons for their lack of interest. The low visibility of MFIs operating in CEMAC on benchmark and other platforms, as well as the lack of information available to the general public on MFIs in the sub-region. The Itimac therefore responds to these problems. In addition to the forum, the Initiative has a digital platform to which MFIs can freely join and be visible throughout the world.
There is also an annual benchmark / ranking of MFIs according to criteria such as total balance sheet, number of customers, outstanding credit, portfolio at risk, etc. As well as an online directory where all the information and references on EMF wishing to make themselves known are available.
The forum, which is in its fourth edition, addresses compliance with the new microfinance regulations, but also several themes to facilitate the competitiveness of MFIs. In this case, the fight against the financing of terrorism and money laundering, the governance of MFIs.
Especially in a context where the default rate is around 30%, which is very high. This often contributes to the failure of microfinance. The forum takes place around a show of technical innovations and financial inclusion in CEMAC and debates on the digital transformation of MFIs in CEMAC and the challenges of agricultural financing.
David Kengne, Organizer of the itimac forum: “Cameroonian EMFs do not publish their figures”
“We are in a context where with the Russian-Ukrainian war, we realized that we depended a lot on imports of agri-food products. Thanks to this crisis, the partners who support Itimac thought that it was necessary to include the financing of agriculture and digitalization in the program. This is to encourage microfinance institutions that are involved in agricultural financing to be able to integrate digitalization into their products and services that they offer to customers to help them boost the granting of credit in number and volume. EMF management must be client-centric and when you put the client at the center of your management, you are bound to adopt the best practices that go through transparency. Transparency is, for example, telling the customer the specific characteristics of each product and when the customer acquires this product, he finds these characteristics in the product. Do not say for example that the credit rate is 1% per month, but when he takes the credit, when repaying, calculation done, he realizes that it is 1.5 or 2%. When you’re transparent, you attract good customers, and when you’re not, non-paying customers come to you.
When we say transparency, it arouses fear, frustration. Gradually, the MFIs who get involved understand that the more transparent you are, the more credible you become vis-à-vis the clientele and the better the activities work. These doubts must be dispelled by adopting good transparency practices. We found that Cameroonian MFIs do not publish their figures while Cameroon is ranked among the top 5 in terms of volume and number of microfinance clients. Unfortunately, they do not take advantage of the benefits of transparency. »