Despite the boom in the banking sector of late, the rate of access to bank services by the public reportedly stands at 8 per cent.
The banking sector in Cameroon is going through a noticeable boom as banks; old and new, local and foreign can be seen opening new branches in the major cities and towns. The territorial expansion of the 12 banks operating in the sector could be interpreted empirically as a success story with the best yet to come.
However, information from the National Institute of Statistics shows that the rate of access to bank services by the public (popularly known in French as “taux de bancarisation”) is relatively low and stagnates around 8 per cent. The inclusion of the microfinance sector takes the rate to 10 per cent. Financial experts attribute this low percentage to the fact that a greater portion of savings and wealth is held, managed and exchanged away from bank channels. Most Cameroonians do not have bank accounts.
According to experts, the rate of access to bank services could be measured by the number of banks in activity; the number of bank branches operating; and the number of bank accounts opened. In countries like France, this rate is more than 100 per cent because of the developed banking culture that allows for persons to hold more than one bank account in several banks.
Reports from the Bank of Central African States, BEAC, and the Central African Banking Commission, COBAC, say the low rate of access to banking services is due to the following factors: lack of trust in the banking system that resulted from the collapse of many banks in the late nineties; high rates of bank charges; low territorial penetration of banks beyond main towns and cities; high minimum amounts required to open bank accounts; low income levels; low literacy rates; sophisticated and digitalised modes of payment; and inadequate responses by banks to the specific needs of some clients. The result has been that, at all levels - rich or poor - more money circulates out of the classical banking network.
However, the situation seems to be changing. The recent growth in the number of banks lends credence to this. Much credit could be given to the boom in the microfinance sector, competition among banks and governments regulatory efforts that have favoured the return of the public’s trust in banking institutions. Through their services and ability to capture even the rural population, microfinance institutions have introduced many Cameroonians to bank accounts and modes of payment or transactions. The competition among banks explains the admirable territorial expansion and outreach of services throughout the national triangle. Government’s efforts to streamline the sector since the nineties have added credibility to those operating in the sector. Furthermore the compulsory payment of civil servant’s salaries through bank accounts and the fixing of minimum creditor interest rates on savings accounts have encouraged even more Cameroonians to own bank accounts. With the imminent creation of a Deposit Guarantee Fund for Central Africa that will reimburse owners of small savings in case their banks file for bankruptcy. There are signs that the rate of access to bank services will rise in the years ahead, especially with the recent introduction of mobile money services and e-banking. Yet, some experts maintain their opinions that only a law, which obliges Cameroonians to use bank accounts for certain transactions or for above certain amounts, could efficiently increase the rate of access to bank services in Cameroon and the CEMAC region.
George MBELLA
