CHAPTER ONE                             

1.1   Background of the Study

CECAW is a second-class microfinance institution as defined by the texts and regulations of COBAC (Central African Banking Commission). To date, its main activity is the collection of savings and the redistribution of this savings to its members in the form of credit.

Created in 1997, by the initiative of the craftsmen grouped within the EspaceMétiers (Structure d’encadrement des artisans), the CECAW is in its 19th year of operation. As mentioned above, the structure began as a Financing Fund solely dedicated to the Espace Métiers, before acquiring its operating autonomy vis-à-vis the latter in 1998.

The CECAW was created with the support of the “DED” (German Development Service) which provided financial support for the operation and provided it with a technical assistant from 1998 to 2006.

From 1998 to 2002 the structure is based in the MADAGASCAR market (which is one of the populous districts of the city of Douala), and operates with a single agency that acts at the same time as General Management.

In 2003, given the ever-increasing demand and volume of activity, a second agency was opened in the city of Douala (a place called “BON FILS”).

In 2005, we received an investment grant from the German organization MISEREOR and a loan from the Dutch organization “CORDAID”; this has allowed us to have a site and a building of its own housing the premises of the management body.

Currently, CECAW owns a built building (R+2), on an area of 300 m2 with a capacity of about 588 m2 of office. This serves as an ex officio for the head office.

In early 2006, two new agencies opened their doors, including the “Congo” Market agency and that of Bepanda American with the integration of the new premises.

At the end of 2008, to be more present in the business center which is AKWA, we opened an agency there to allow our establishment to explore other areas of activity such as salary transfers.

Always with the aim of diversifying the sectors to be financed and making CECAW more sustainable, two new Agencies will be created, outside the city of Douala.

AUGUST 2010, opening of the CECAW branch in Yaoundé, located in Mokolo/Messa;

October 2011, opening of the CECAW branch of BAFOUSSAM, located in Djemoun.

In September 2014, another CECAW agency opened its doors in the city of Douala, more precisely in Bonabéri (after the rail market).

1.2    STATEMENT OF PROBLEM

Cameroon as a third world country falls under the category of heavy indebted poor countries (HIPC). As such majority of the population lives below the poverty line thus making it difficult for these persons to be served by commercial banks.      

With these problems at hand, microfinance institutions have a very important role to play. CECAW are out for poverty alleviation; that is try to serve the poor and those excluded from commercial bank conventional banking. Therefore given that micro-finances are out for poverty alleviation and majority of the population of Cameroon is poor CECAW have a very sensitive role to play in Cameroon. The problem here is to know if microfinance will be able to adequately serve the poor population in Cameroon. The topic is aimed at providing evidence that CECAW are important arm in alleviating poverty in Cameroon.

1.3 OBJECTIVES OF THE STUDY

             The main objective of this study is to examine the impact of microfinance institutions on the Cameroon economy.

1.3.1 The specific objectives include:

1. Identifying the impact of microfinance institution on the economy of Cameroon.
2. To examine the impact of CECAW Mokolo Microfinance on Cameroonian economy

• Making necessary recommendations based on the need to establish more microfinance institutions in Cameroon.

1.4 Research Questions

1.4.1 General Research Questions

What is the impact Of Microfinance Institution in the Economy of Cameroon?

1.4.2 Specific Research Questions

1. What is the impact of microfinance institution on the economy of Cameroon?
2. What is the impact of CECAW Mokolo Microfinance on Cameroonian economy?
3. Is there a need to establish more microfinance institutions in Cameroon?

1.5 RESEARCH HYPOTHESIS

           The hypothesis is the proposition, condition or principle that is assumed without believe in order to draw logical consequences subject to empirical verification. Hence to better verify the above objectives, we assume the following objective. The hypothesis is as follows:

H1: Microfinance institution has an impact on the economy of Cameroon.

H2: Microfinance institution has a positive impact on the economy of Cameroon.

H3: Microfinance institution has a negative impact on the economy of Cameroon.