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By Dr. Jean Cédric Kouam & Victoire Agnès Mokam (Download pdf version)

The Impact of Financial Inclusion on Cameroon’s Economic Growth


According to the World Bank (2014), financial inclusion is defined as the ability of individuals and businesses to access, at low cost, a range of useful and appropriate financial products and services (transactions, payments, savings, credit, and insurance) from reliable and responsible service providers, access to an account is the first step.

In Cameroon, several factors are favorable to financial inclusion. This is particularly the case for tontines, whose participation opens up possibilities for members to obtain loans from banks and microfinance institutions, thanks to the collective and moral guarantees provided by the group (International Monetary Fund, 2018).

In Cameroon, the specific diagnostic analysis of the financial sector reveals the low effectiveness of the development policy put in place to revitalize the traditional banking system. According to Cameroon’s Ministry of Finance, in 2020, 58% of the working population preferred tontines to traditional banks, in particular, because of the simplified credit conditions they have. Also, because of low interest rates, the rapid availability of cash, no long lines, and procedures required by banking institutions. They believed these institutions limited financial inclusion in the country.

One of the priority objectives listed in the new national development strategy 2020-2030 (NDS30) is to promote financial inclusion as well as a densification of the financial and banking system. The Government of Cameroon aims to increase the banking rate from 12.2% in 2020 to 80% in 2030. At the same time, it is a question of substantially increasing the bank financing of the economy from 15.9% of GDP in 2018 to a minimum of 70% of GDP in 2030 to achieve near double-digit growth.

To achieve better financial inclusion, the government, in the 2022 finance law, has proposed to impose a tax of 15% on the income plus 10% additional municipal centimes (CCA) on any non-profit entity exercising a profitable commercial activity, including tontines.

The objective of this paper is to analyze some effects of financial inclusion on economic growth in Cameroon. The article is structured in three sections. Section 1 presents an inventory of financial inclusion in Cameroon. Section 2 analyzes the effects of financial inclusion on economic growth, and Section 3 concludes with some policy recommendations.

State of Play of Financial Inclusion in Cameroon

The quality of access to financial services can be assessed by analyzing the conditions for opening a bank account as well as those related to the use of associated means of payment, such as mobile money, transfers, the use of credit cards, etc. (Guérineau and Jacolin 2014).

In Cameroon, the government’s strategic orientations for the development of the financial sector reveal that financial inclusion is a catalyst for economic growth. Indeed, economic agents, most of whom operate in the informal sector, face many financial difficulties, most often related to their poor access to the service offers of existing credit institutions. Among these difficulties, there is mainly the too-high cost of the service, the transport costs, and the lack of guarantees (Zins, 2017); gender inequalities (Kaur and Kapuria, 2020); high-interest rates (Wokabi and Fatoki, 2019); legal rights and political environment (Demirguc-Kun and Peria, 2016), and low branch density (Guérineau and Jacolin, 2014).

Despite the slight upturn observed in recent years, it remains insufficient to ensure sustainable and inclusive growth. Indeed, the rate of use of the mobile payment service has only increased from 1.83% in 2014 to 2.44% in 2020 (BEAC, 2020), and the percentage of the adult population who declares having an account in a financial institution or use a mobile money service increased from 15.8% (2014) to 39.6% (2018), according to the World Bank (2019).

According to the International Monetary Fund (2020), the outstanding loans of Cameroonian commercial banks experienced positive growth between 2010 and 2020, rising from 12% in 2010 to 16% in 2020, while the share of these loans granted to households only does not has not experienced a significant change, averaging 3%. Mobile money transactions in value have also experienced positive growth, rising from almost zero in 2010 to reach 55% in 2020. However, the share of household deposits, on the other hand, has remained almost constant over the whole period.

Effect of Financial Inclusion on Economic Growth in Cameroon

The economic literature on the effects of financial inclusion on economic growth is abundant. Nana Kuindja (2020), for example, analyzes financial inclusion and growth in sub-Saharan Africa by focusing on the quality of institutions. He concludes that the positive effect of financial inclusion on economic growth cannot be observed without the improvement of government institutions in Africa.

Dontsi (2021) measures financial inclusion based on the rate of use of “Mobile Money.” The results show that an increase in the rate of use of “Mobile Money” would lead to an increase in the rate of economic growth in the CEMAC zone. Similarly, access to multiple financial services increases the likelihood of the formalization of SMEs in Cameroon (Kede and Tsafack 2021).

The overview of the literature not only makes it possible to establish that financial inclusion has a positive influence on economic growth but also to note the fact that these studies were limited to using a non-linear model. In these studies, the variables used to measure financial inclusion mainly refer to agents’ access to financial services, lending rates, and the value of mobile money transactions.

From analyzes we have carried out, we show that financial inclusion has significant positive effects on economic growth in Cameroon. In general, loans from commercial banks positively influence economic growth, especially those granted to individuals.

It also appears that a 1% increase in loans granted to the household sector, which would result in better financial inclusion, would lead to an improvement in economic activity in Cameroon of around 0.7%. This positive effect of inclusion on growth is corroborated by the work of Dontsi (2021) as well as that of Kede and Tsafack (2021).


The objective of this article was to analyze the effect of financial inclusion on economic growth in Cameroon. The results obtained indicate that economic growth could be boosted by an increase in loans granted to the household sector, which would also reflect some improvement in financial inclusion. Traditional commercial banks should draw more inspiration from the operation of tontines to attract as many economic agents as possible, particularly those in the household sector, to use traditional formal financial services.

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Jean Cedric Kouam is the Deputy Director-Economics Affairs Division and the Head of Fiscal and Monetary Policy Sub-section at the Nkafu policy Institute. He holds a doctorate in economic policy and analysis (monetary and financial macroeconomics) from the University of Dschang in Cameroon.