How to Open a Microfinance or Credit Union in Cameroon

Opening a cooperative society or credit union in Cameroon comes with numerous advantages.

What is a Credit Union?

A credit union is a group of individuals who meet their everyday cultural, social, or economic needs.

Advantages of Creating a Credit Union

• Lower Fees: Credit unions tend to offer lower fees than banks. This is because of their not-for-profit business structure and their tax-exempt status. Rather than paying shareholders, credit unions can reinvest their earnings back into their members. This decreases the need to charge fees such as overdraft penalties.
• Better Savings: This is achieved through better interest rates.
• Lower Loan Rates
• Credit Unions are local experts
• Commitment to Members: As nonprofit businesses, credit unions rely on their membership to continue operating rather than being driven by profit. Members of credit unions enjoy the benefits of the organization’s strong focus on personalized customer service.

See Also: List of Cr

edit Unions or Microfinance Institutions in Cameroon.

Categories of Credit Unions in Cameroon

Cooperatives or credit unions in Cameroon can be created in 2 categories as follows:

1. Category 1 Credit Union
2. Category 2 Credit Union

Minimum Number of Members required For the Creation of a Credit Union in Cameroon

The minimum number of members and share capital in each category are as follows:

Category 1 Credit Union 

The minimum number of members required to create a category 1 cooperative is 100 members per the COBAC Regulation. Also, a minimum share of 10000 FCFA each is given a minimum share capital of one million XAF. Furthermore, all Category 1 cooperatives or credit unions must be affiliated to CAMCULL and pay a fixed entry fee of 200000 FCFA.

See Also: How to Create or Register an NGO in Cameroon?

Category 2 Credit Union 

The minimum number of registered members required to create a category 2 cooperative are 3 members with a share capital of 40,000,000 FCFA to 300,000,000 FCFA and must have a board of directors.

Cooperatives are subjected to control, and their activities are regulated by COBAC and CEMAC regulations.

How to Open a Microfinance or Credit Union in Cameroon (Requirements)

The following requirements must be met to create a credit union or cooperative society in Cameroon:

1. Application form
2. Articles of Association
3. An Attestation of deposit
4. Required Judicial extracts
5. A Certificate of subscription of shares
6. List of members
7. List of board of directors attached to minutes
8. A Localization plan

Suggested: How to Create an Account in a Credit Union in Cameroon.