Analysis: The National Economic and Financial Committee (CNEF) is an essential actor for financial inclusion in Cameroun

To make the National Inclusive Finance Strategy a reality for all Cameroonians, the CNEF is at the forefront, resolutely committed to the protection of financial consumers. Learn more about its key projects and why UNCDF is supporting its work.

Commitment to financial inclusion in Cameroon

Cameroon published its National Inclusive Finance Strategy (SNFI) on February 21, 2023. This strategy aims to increase access for all to an increasingly diversified range of financial services and products. The idea underlying the strategy is to focus on the most vulnerable populations, which usually include rural populations, women, young people, the elderly and small and medium-sized businesses. 

The role of consumer protection in financial inclusion

Among the strategic axes of the strategy, the protection and education of financial consumers is a fundamental pillar for developing the use of financial services of all types (including digital financial services). Indeed, one of the main development levers of the financial sector is to increase the population's confidence in the services that this sector offers by strengthening, inter alia, the mechanisms of transparency and information, collection and resolution of complaints, customer relations etc. In Cameroon, an analysis of requests from customers of credit and microfinance institutions received by the CNEF reveals numerous abuses including poor management of customer accounts (e.g. unjustified deductions) as well as fraud (e.g. embezzlement of wages).

The role of the CNEF in consumer protection

The CNEF (formerly “Conseil National du Crédit”) plays a key role in consumer protection, and consequently in the implementation of the SNFI led by the SNFI Support Program (PA-SNFI). As evidenced by Doctor MEBENGA M'ENAM, Head of the Financial Stability, Banking Activities and Financing of Economies Department of the National Directorate of the BEAC for Cameroon, in charge of the CNEF, “The objectives of the SNFI in terms of consumer protection are ambitious. The CNEF, in its permanent desire to promote a fair and equitable financial system, has distinguished itself for many years in this field and intends, as such, to help the SNFI to achieve these objectives.”

This entity, established under sub-regional regulation 03/2019 in all CEMAC countries, is headed by the national director of the BEAC of each country (its Secretary General) and by the Minister of Finance (its President). The mission of the CNEF — detailed in the sub-regional texts — is, in fact, to regulate the relationship between customers and credit, payment and microfinance institutions, insurance companies, brokerage and management companies of portfolio, and as such, to develop and propose action plans to the Minister of Finance to improve access to financial services. The CNEF also cooperates with the Central African Banking Commission (COBAC) — regulator and supervisor of the protection of financial consumers in the CEMAC zone — to organize the mediation process concerning financial consumers.

A strategy underway: spotlight on key projects

Financial mediation

Among the projects already in progress which participate in the implementation of the strategy, the CNEF organizes, in application of community texts relating to the protection of consumers of banking and financial products, a process of financial mediation between the institutions subject to the law and between them and their customers. The implementation of this process will complement the internal complaint handling arsenal of banking and non-banking institutions that provide financial products and services. Work in progress provides for the appointment of mediators by sector of activity (banking and microfinance, insurance, management and holding companies, etc...) whose remuneration is the responsibility of the CNEF.

Arbitration of claims relating to the Guaranteed Minimum Banking Service (SBMG)

The arbitration of complaints in connection with the Guaranteed Minimum Banking Service (SBMG) has been a mission assigned to the CNEF for about ten years by Order No. 000005/MINFI of January 13, 2011. The execution of this mission revealed the scope of consumer complaints, going well beyond the provisions of the SBMG.

Monitoring Social Performance Management

Monitoring the Social Performance Management (GPS) of financial institutions is another very important project for consumer protection. The CNEF is responsible for producing an annual report on the subject and provides Microfinance Institutions (MFIs) with an online self-assessment tool (CASEMF) which produces a quarterly report for all institutions connected to the CNEF IT platform.

Upcoming projects

There are many upcoming CNEF projects to strengthen the protection of financial consumers.

As part of the reinforcement of transparency and the obligation of information, the CNEF intends soon to set up a price comparator whose main expected result will be to allow consumers, establishments subject institutions, investors, public authorities and international partners, continuous online access to up-to-date data on average APRs and bank charges applied by all subject institutions operating on the Cameroonian market, by region, and in ascending or descending order. This service could also, in the long term, allow more competition and lead to a drop in the cost of credit and banking services for financial consumers.

Another project aimed at protecting consumers against over-indebtedness will be to create educational sheets for consumers to alert them to the risks associated with subscribing to financial services. As such, the CNEF has drawn up and will publish from the third quarter of the 2023 financial year, an annual report on the evolution of banking practices in terms of pricing, which allows it to identify the areas in which a need for reinforcement of consumer information exists. This very first report covers the period 2021-2022.

Education, transparency, adaptation: three major challenges and opportunities for the CNEF

Financial education

The first is financial education. According to the survey on the pricing of financial services conducted by the CNEF in 2017 and 2022, bank customers are not well informed about the costs of financial products and services, as well as about bank conditions and the Minimum Guaranteed Banking Service (SBMG). This indicates a general state of poor financial education that must be addressed both at the level of banks and payment institutions, which are increasingly important in the Cameroonian financial landscape. The popularization work carried out by the CNEF through ongoing projects (educational sheets and price comparison) is fundamental for financial education. That being said, by collaborating with other players such as payment establishments (e.g. Orange Money and MTN), credit establishments and microfinance establishments, some of which are already well underway in this field, the CNEF has the means to go even further.

Transparency tools

The second challenge is that of transparency tools. The CNEF's IT platform, which brings together several databases, is not sufficiently known and used by the institutions subject to the law and the general public. This is reflected, among other things, by the irregular feeding of the CNEF IT platform by these establishments, by the rarity of requests relating to the rectification of erroneous data declared electronically in the said platform, and by its low consultation by the public (RNSM) . The solution — clear but not so simple to implement — is the popularization and deployment of this platform to all economic players, so that it is widely known and used by both financial institutions and the general public. . Like financial education, the popularization of this tool requires the operationalization of an inclusive communication strategy which the CNEF is already thinking about.

The adaptation of the CNEF to digital financial services

A third challenge, and not the least important, is the adaptation of the CNEF to the challenges of consumer protection specific to digital financial services. The CNEF's mission to implement the mediation service for financial consumers will lead to increased exposure to these consumers. Thus, the CNEF will have to gradually adapt the tools and services conceptualized for banks and MFIs to payment institutions that provide digital financial services through electronic money.

UNCDF's role and next steps

UNCDF's "PRIME" approach to improving financial consumer protection recognizes the rapidly changing landscape of digital financial services and the challenges regulators and policymakers face in addressing the emerging risks.

UNCDF supports the CNEF in the implementation of the NFIS through capacity-building and direct technical support, in particular on consumer protection aspects of digital financial services and on good practices to be adopted by all financial sector professionals. In the past, UNCDF has contributed to the development of Cameroon's NFIS.

With its mandate and positioning at the crossroads between sub-regional regulators (COBAC, BEAC) and national actors who have direct contact with consumers of financial products and services, the CNEF has is well placed to make a positive impact on financial consumers in Cameroon.