Daniel Kalbansou, Executive Director of the Credit du Sahel has noted that a sector founded by the microfinance establishment (EMF) which he heads is not illegal.

"I would like to clarify that the regulation of the sector of the EMF in Central Africa allows the latter to achieve 20% of their turnover in activities other than the granting of credit or collection of savings," he said in an interview with investir au Cameroun, which will be soon published in full on the same platform.

With this branch opened in the EMF, Credit du Sahel, is in the form of micro-banque and very active in the rural areas of the northern part of Cameroon, which is also part of the microfinance sector in the country.

Here it has found a great clientele base to secure repayments of loans that is usually given to small farmers via a mechanism of credit guarantee by production.

"You realized that, the non-repayment of advances received by farmers is not always related to the bad faith of the latter. In most cases, the money they receive goes to finance the fertilizer and other inputs.

They however, do not give loans for the harvest, under the combined effect of the increase of supply and the need for income, these farmers are often forced to sell their products at prices that ultimately fail to cover all of their expenses, including repayment of their loans', explained the DG of Credit du Sahel.

Also, EMF has implemented a mechanism "upstream to finance the acquisition of inputs in order to increase production and, downstream, retrieves the production that will open in order to get a refund.

In practice, this production is kept "in warranty for 2 or 3 months, at the end of which prices generally go up. We then sell the collected production and we charge an amount on our credit plus interest. When there is a surplus of resources, we put it in the accounts available to affected farmers".

Through this mechanism, noted Mr. Kalbansou, 'upstream, we support the improvement of volumes produce and downstream, we find markets for surplus production that could allow us obtain a reimbursement of advances. Within one year, we will try to perfect the mechanism.

We have added the concept of fair-share financing. Because, in the end, we take the peasant production at a higher price than it can draw on its own on the market.

In addition, when there is surplus at the time where we sell, the farmer receives a bonus. "This encourages them to take the credit and honour commitments.