Any person desirous to register a micro-finance in Cameroon must comply with Regulation in force. This Regulation is No. 01/00/CEMAC/UMAC/COBAC of January 2002. According to this regulation, a Micro-finance is an activity carried out by accredited entities that do not have the status of a Bank or Finance establishment. The above definition is given by the convention of 17th January 1992 on the harmonization of the Banking regulation in the Central African States. The 17th January convention is responsible to regulate the habitual operations of Credit, collection of savings, and offer specific financial services to the public.
In Cameroon, a Micro-Finance registration process is illustrated through regulatory bodies. Each of these bodies play a role in the registration process. We shall illustrate the birth, purpose, and scope of a micro-finance below;
BIRTH, PURPOSE AND SCOPE OF A MICRO-FINANCE IN CAMEROON
The birth of Micro-Finance institutions is as a result of the difficulties of the traditional banking system. These difficulties widened the margin between financial services and economic initiatives at the grass-root level.
Any physical or corporate person wishing to register a Micro-Finance institution in Cameroon must engage a qualified attorney. The attorney will inform the investor of the steps to be taken. These steps illustrate what is needed to register a Micro-Finance institution and the Micro-Finance registration process in Cameroon.
A Micro-Finance has to be in the legal position of a Public Limited company, a Sleeping Partnership, a Cooperative Credit Bank, or Association in accordance with EMF/2002/21 COBAC.
Micro-Finance institutions are divided into 3 categories and each category has its specific way of collecting funds in accordance with Article 5 of Regulation No. 01/02/CEMAC/UMAC/COBAC of April 13th 2002. The legal form of each category is as prescribed by the Banking Commission of Central Africa is illustrated below;
- Category 1/Class one Micro-Finance Institutions are those which have members and accept deposit from and grant loans only to members. This category includes associations, cooperatives and credit unions,
- Category 2/Class two Micro-Finance Institutions are those which accept deposits from members and third parties(customers). This category groups limited liability companies that function like micro banks, and
- Category 3/Class three Micro-Finance Institutions are those engaged in lending only and they do not collect savings and deposits. They include micro-credit and project financing institutions.
We shall hereafter examine the following aspects below;
WHAT YOU NEED TO REGISTER A MICRO-FINANCE
What you need to register a Micro-Finance in Cameroon is provided by a qualified attorney. The steps include;
ACCOMPLISH THE TASK OF REGISTERING A COMPANY
Any persons interested to register and operate a micro-finance institution in Cameroon must, first of all, have a company registered with the objective to provide the services of a Micro-Finance Institution. This is because the company registration documents form part of the documents required in registering a Micro-Finance institution in Cameroon.
CHOOSE THE CATEGORY OF MICRO-FINANCE INSTITUTION TO REGISTER
Upon the accomplishment of step 1 above, a choice has to be made of the category of Micro-Finance Institution to register and operate. This is because each category has its own modus operandi and requirements to be met by the applicant.
DOCUMENTS TO PROVIDE TO REGISTER A MICRO-FINANCE
After the accomplishments step 1 and 2 by the person desirous to register a micro-finance in Cameroon, the applicant will have to furnish the Attorney with certain documents to be used in support of the application. These documents include the following;
- A stamped application for the specific category,
- A certificate of Incorporation,
- Minutes of the Constitutive general assembly,
- The Memorandum and Articles of Association,
- The list of members and shareholders etc.
MODALITIES TO INTEGRATE INTO A NETWORK ORGANISATION
Accredited Micro-Finance institutions wishing to integrate into a network must request the authorization of the Banking Commission. The authorization is subject to certain requirements (documents). The documents include but not limited to;
- The explanatory statement illustrating the reasons,
- The Minutes of the general assembly of the establishment authorizing its membership to the network,
- The minutes of the general assembly of the network organization authorizing the membership of the institution,
- The accounting documents for the last three exercises etc.
There are other conditions particular to the network organization which must be fulfilled after obtaining the approval of the Banking Commission. These conditions must b fulfilled with the help of an Attorney. we shall examine the scope of the authorization given to managers of a micro-finance institution below;
AUTHORIZATION OF MANAGER(S)
The monetary authority gives approval to a manager after notification from the Banking Commission. The documents subject to such authorization include but not limited to;
- Copy of Birth Certificate,
- Two Identification Photo,
- A Curriculum Vitae,
- Copies of acquired qualification,
- A copy of minutes of Board of Directors or Institution’s meeting appointing the manager(s) etc.
AUTHORIZATION OF AUDITORS/ CERTIFIED CHARTERED ACCOUNTANT
The auditor or certified chartered accountant must submit certain documents for approval. In addition to the documents must be a copy of the CEMAC Approval to operate as an Auditor or Certified Chartered Accountant.
It is important to note that there are other conditions particular to the office of the Manager and Auditor as regards Micro-Finance Institutions affiliated to a Network Organization, and the Network Organization itself.
The authorization can be revoked by the monetary authority.
MICRO-FINANCE REGISTRATION PROCESS
The Micro-Finance registration process in Cameroon can only commence after an Attorney has received all necessary information and compiled all the required documents for persons desirous of registering a Micro-Finance Institution.
- A stamped application for the category in the regulatory bodies in charge. This application is accompanied by all the documents aforementioned.
- A stamped application for the authorization of the manager(s) for the particular category alongside all the documents aforementioned.
- A stamped application for the authorization of the Auditor or Certified Chartered Accountant for the particular category alongside all documents aforementioned.
The dateline for the grant of license is 3 months after the successful submission of all documents to the various regulatory bodies in charge of the process.
Failure to commence operation within a timeframe of 12 months after the grant of a license, the monetary authority shall withdraw the license.
Article by Barr. Agbor Kima Divine Ngema
Kima & Partners Firm