The Primordial Place Of The Customer

The issue might not be whether or not there were treasury crisis in the Compagnie équatoriale pour l’Epargne et le Crédit (Comeci).


But what happened last week in Bafoussam and Douala was something to worry about. Customers of the famous microfinance on hearing that liquidity was fast dwindling rushed to the financial institution en masse requesting to withdraw their savings. There was real commotion in the two cities and it required the intervention of the forces of law and order to contain the pressure. In effect, customers not stating clearly why they had to come almost spontaneously to the microfinance took advantage of the school reopening, stating inter alia that they needed money to finance their children’s school requirements. From every indication, that was not the real issue. The problem was the security of their savings.

This is not the first time customers are having entanglement with a microfinance institution. Memories are still fresh on the crises that hit some of the institutions forcing government to close down over 30 of them for irregularities. Cases abound where some of them absconded with customers’ savings. Customers of Cofinest licked their wounds for several years following the collapse of the financial institution in 2011. The collapse, it should be recalled sparked a serious revolt from account holders.

Cofinest’s solvency problems were first revealed in December 2007 when Cobac placed it under provisional administration after audits disclosed a number of irregularities resulting into substantial non-performing and insider loans worth FCFA 3.9 billion. As a result of the limited power of the regulator, efforts to improve the bank's loan portfolio and prevent it from falling proved futile and at the time of the collapse Cofinest’s shareholders owed the bank around FCFA 5 billion, almost five times its reported net assets and far exceeding Cobac regulations on insider lending.

The shortcomings in the microfinance sector have left no one indifferent and in 2013, the Ministry of Finance forced many of them to shut down. The reasons were clear; reported fraud, disobedience and blatant disrespect of defined procedure in setting up as well as managing the structures. Quite aware of the fact that the administration equally had its own share of the blame, government initiated new reforms. Whether or not these reforms have yielded any fruit is another issue but the most important thing is the protection of customers’ savings and shareholders’ shares.

This can better be done by building up a veritable insurance structure and ensuring that all microfinance institutions save a certain percentage of their capital in them. This is surely an important element of guaranteeing customers’ savings and avoiding these series of embarrassments.








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