(Business in Cameroon) – Seven years after its implementation in 2017, many microfinance institutions (MFIs) in Cameroon are still not complying with the Cobac (Central African Banking Commission) regulation on internal control. This issue was highlighted on June 19 at a forum in Douala organized by the Microfinance Academy. The regulation mandates regular verification of the activities of operational units to ensure the accuracy and honesty of operations and to manage the risks associated with these operations.
Industry experts cite several reasons for the non-compliance, despite a two-year deadline for implementation. A key issue is the lack of awareness. “The regulations are not well known by all sector players, especially board members who need to drive the initiative so that everyone, from senior management to junior staff, follows suit,” said Merlin Lemou Nzoupet, an internal auditor at Mupeci.
Cost is another barrier. “Establishing a full internal control system requires significant financial and human resources. Expert guidance is needed. Increased awareness is crucial, which is why training seminars are important. They help stakeholders understand their delay, as deadlines have long passed,” added Nzoupet.
Implementing an internal control system offers significant benefits, reassuring stakeholders and investors. “When an MFI complies with internal control measures, it becomes more productive and customer-focused. Internal control protects deposits, assets, and the MFI’s properties, ensuring better service for clients and securing their revenues. This makes the MFI more solvent and profitable, which benefits the national economy,” explained David Kengne, promoter of Microfinance Academy and an expert in inclusive finance.
MFIs that have already implemented this regulation report significant benefits. “We are much more up-to-date in terms of operation control, which positively affects daily operations. Multiple levels of control protect both the institution and the client, making the business more sustainable and beneficial for our activities,” said Aurelie Zogni Wadji, internal audit director at Focep SA.
Non-compliant MFIs face potential sanctions from the Cemac banking sector regulator (covering Cameroon, Congo, Gabon, Chad, Central African Republic, and Equatorial Guinea). Penalties range from warnings to the withdrawal of licenses, in line with the regulations for handling troubled credit institutions in Cemac. However, no microfinance institution has been sanctioned yet. The internal control system required by the banking commission applies to second and third category MFIs, umbrella organizations for first category MFIs, and large first category MFIs.
