I.2- Problem statement
The microfinance sector in Cameroon is quickly expanding, and
institutions have increased their activities. In fact, the microfinance sector
has a customer base of about 1.2 million clients (2012 Cameroon financial law:
Report of the Economic, Social and Financial Situation and Prospect). This
sector has been successful in reaching the population excluded from the
classical financial system. In the last decade, efforts have been concentrated
towards financial and institutional sustainability of the microfinance
institutions. The objective of these MFIs is to reach the best possible
performance, which can be achieved when people combine two requirements,
namely: social performance (through the reduction of poverty) and financial
performance (in ensuring sustained profitability). However, these two
requirements raise a debate between two opposing schools of thought:
? The «welfarists» argue that, the social
requirement of targeting the poorest and improvement of living conditions;
11
Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
? «Institutionalists» defend the
requirement of economic profitability and viability of institutions.
MFIs of Cameroon provide a clear illustration of this discussion
and analysis of their activities that can answer the questions: Is there a
trade-off between the two types of performance namely social and financial
performance? In other words, does the pursuit of social objectives enable MFIs
eventually to expand their financial performance?
I.3- Context of the study
Microfinance is financial intermediation for the poor who
have low incomes and are generally excluded from traditional banking system.
Therefore, most African countries have developed in their economic policies
actions involving microfinance, in order to reduce social inequalities and
fight against poverty.
The importance of this study is not only toward the emergence
of Cameroon in 2035 (through the Cameroon 2010 Strategy Document for Growth and
Employment: SDGE), but especially in studies focused in this area. Indeed, very
little studies on the performance of MFIs were conducted in Cameroon and even
less on measuring social performance of the latter.
Our study will provide tracks reflections on dilemma of the
trade-off between social performance and financial performance, which is a
limit for the development of MFIs. However, many impediments have been
encountered in our analysis. Which is notably the lack of empirical data on
microfinance and the lack of tools and methods of the analysis of microfinance
performance. Despite these difficulties, we have focused our reflexion towards
a convergence of objectives of microfinance institutions and by extension for
sustained development of the informal sector in Cameroon.
I.4- Objectives of research
This study is intended to investigate the relationship between
social and financial performance of MFIs and factors that contribute to the
development of informal sector, with a particular interest in the role that
microfinance institution may be playing. In addition to gaining a more general
understanding of the challenges facing developing informal institutions, the
study will identify how the evaluation of microfinances? performance is
contributing to the development of small and medium size businesses and how we
can overcome the arbitrage between social and financial performance of
microfinance institutions.
12
Analysis of microfinances' performance and
development of informal institutions in Cameroon
By Djamaman Brice Gaétan
This study is focused on the assessment of microfinace
performance and how microfinance may contribute to improve or to boost the
development of the non-formal institutions. The specific objectives in this
study are as follows:
+ To give an overall view of microfinance sector and
informal institutions in Cameroon and especially in Yaoundé (creation,
typology, regulation, etc.);
+ To set up a research methodology: which is based on
research question, which will try to
overcome the arbitrage or trade-off between social and financial
performance of MFIs; + To set up the correlation between microfinance
and development of informal sector;
+ The last but not the least objective will be to find
out if the pursuit of social objectives
enables the MFIs to eventually expand their financial
performance.
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