Target group. The project will target rural poor people who lack access to financial services, particularly women and young people. Working with microfinance institutions (MFIs) operating in rural areas-both independent MFIs and those belonging to networks-it will focus on geographic areas where IFAD-funded projects already operate in order to foster synergies and maximize impact. Consequently, the project will start up in villages in West, Centre, North and Far North Provinces already covered by the Community Development Support Programme and the National Root and Tuber Development Programme (PNDRT). Subsequently, it will extend its activities to the other provinces targeted by PNDRT and to those to be targeted by a future IFAD-funded value chain project. Project objectives. The project will increase rural communities’ incomes through improved access to quality financial services. More specifically, it will (i) enhance the access of rural micro, small and medium-sized businesses to financial services adapted to their needs; (ii) improve the performance of MFIs by consolidating them and extending the range of their coverage; and (iii) improve the enabling environment for microfinance by, among other things, strengthening the capacity of the National Association of Cameroonian Microfinance Institutions (ANEMCAM). Project description. In addition to project coordination, the project will have three components:
Potential cofinanciers. Discussions regarding possible cofinancing are under way with various donors, including the European Union. Interested cofinanciers are invited to contact IFAD. Photo caption 1: Photo by Jean-Luc Camilleri - Cotton harvesting Photo caption 2: National Root and Tuber Development Programme - Cassava market |
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Project area. The project will be national in scope.
Important features. A recent evaluation of the microfinance sector has uncovered a host of constraints to the supply of and demand for microfinance services in Cameroon. Several initiatives are under way to address demand-side constraints. The proposed project will mainly address supply-side constraints with a view to providing financial service options to rural communities. Since the binding constraint facing rural MFIs is a lack of financial resources, an important innovation to be introduced by the project is the fostering of a closer relationship between MFIs and the commercial banking sector. To achieve this, the project will put in place a line of credit aimed at commercial banks, giving them access to funds at a relatively low interest rate consistent with existing rules. The banks will then extend loans to rural MFIs at reasonable interest rates, and savings will subsequently be passed on to the rural poor, as reflected again in the lower interest rates charged. The project is in line with IFAD’s country strategic opportunities programme and with the country’s poverty reduction strategy paper, in particular the rural sector development strategy.