Credit Against Poverty (CAP)

Access to bank loans is practically impossible for the poor in Cameroon. The guarantees they have to furnish are beyond their capability and the procedures are long, expensive and without assurance. Some may succeed in obtaining a loan from usurers, but struggle with their excessive interest rates. Against this background, the poor remain marginalized as they lack the financial or material means to ensure their livelihood, systems to secure savings, or technical insights and advice to render their initiatives more successful.

A Micro-Finance Task Force, composed of representatives from seven different network member organizations, has designed a micro-finance program that will provide low interest loans for projects of target groups affiliated with RELUFA's member organizations. The Task Force worked in three sub-groups: the visionaries developed the vision, goals and objectives; the micro-credit technicians elaborated the financial strategies; and those with experiences in legal matters of establishing micro-finance programs focused on the juridical implications of the plans. The work of these sub-groups was harmonized and compiled into a working document. Under the name Credit Against Poverty, the program was oficially launched at its constitutive General Assembly of 27 August 2005.

The program's main goal is to provide loans and close accompaniment to poor communities throughout Cameroon. Participation in the program is restricted to RELUFA member organizations, and its direct beneficiaries are the target groups affiliated with these members. To apply for a loan, the beneficiary submits a project proposal to the affiliated member organization and seeks her sponsorship for the loan request. The member organization conducts an economic analysis of the project, interviews the beneficiary, evaluates her financial and technical capacity to implement the project, and brings it before the national credit committee. This committee examines the project proposals and appraisal reports from all applicants and makes a final decision on the loan requests.

Upon approval, a loan agreement is signed by CAP as the lender, the RELUFA member organization as the sponsor and guarantor, and the beneficiary as the borrower. CAP's staff then makes the funds available to the sponsoring member organization, who ensures the disbursement of the loan to the beneficiary and the repayments to CAP. The sponsor provides further technical assistance and continued accompaniment in the field to increase the success of the project.

RELUFA organizes workshops and seminars to sensitize RELUFA member organizations and their target groups about the program's philosophy and intentions, and to train them in project development, book keeping, and general loans and savings operations.

 The task force at work     The founding GA >>>