Sector Study on Financing Instruments for the Rural Sector in Cameroon

2014-12-31 - 2015-03-31

LFS was commissioned by KfW to conduct a sector wide analysis in Cameroon, with the objective of analysing the rural financial sector and creating detailed recommendations on potential financial sector interventions. The project commenced in January 2015, and was implemented through desk research as well as a one month field mission to review the current supply of financing in the rural sector of Cameroon and the accompanying political and legal environment. This included meetings with MFIs in the sector, with relevant government ministries, with local experts of agriculture, and with farmers. The outcome has been policy recommendations for KFW regarding future financial sector interventions to support the rural agricultural sector in Cameroon. These recommendations include a refinancing line for select local MFIs, technical assistance for select commercial banks and/or MFIs in the form of training, and a partnership with existing donor projects that also target access to rural finance in Cameroon.
A team of consultants (2 international and 1 local) and 1 project manager were responsible for conducting a sector analysis and producing a 50+ page report (plus annexes) that covered all of the following tasks: Obtain a global view on rural/agricultural finance in Cameroon Analyse the role of actors in the sector Assess the effectiveness of the finance sector in providing financial access to rural MPMEs and small farmers Identify the products offered in the rural finance sector in Cameroon Analyse the role of rural finance promotion programs of the State or public banks Analyse the political context and general conditions for the financing of the rural sector Analyse the agricultural sector and its needs in terms of financial services Analyse the target group's access to financial services and financial needs for different Cameroon agro VCs Identify other value chains that are interesting from a financial sector perspective Assess the demand for loans and other financial services among rural MPMEs and small farmers and obstacles to financial services Assess the importance of MPME and small farmers in agro VCs Assess the importance of the VCs under consideration in terms of food security and job creation Identify how the actors of the target group presently finance themselves Evaluate other financial services in the agro/rural sector Identify the technologies currently used for agro lending and for other financial services that are used by the target group Assess the level of accessibility of the target group to agro insurance Analyse the feasibility of projects that could be financed by the German-Cameroonian financial cooperation in terms of promoting rural finance Assess the engagement of other donors in terms or financing the rural sector Assess the potential for a project financed by financial cooperation. If potential exists, assess the financial needs and absorption capacity of possible beneficiaries, and propose concrete propositions for such a project Assess if there are opportunities for project complementarity with the GIZ 'centre for green innovation' Analyse the constraints and risks for the project that is proposed, as well as risk mitigation measures