• COBAC places Nofia S.A. under administration amid broader MFI crackdown in Cameroon
• Reforms target governance and internal controls; several MFIs already sanctioned
• Cameroon holds 81% of CEMAC’s bad microfinance loans, raising regional risk concerns
  

La Nouvelle financière africaine (Nofia S.A.), a Category 2 microfinance institution, was placed under provisional administration for six months in June 2025 by the Central African Banking Commission (COBAC), the financial regulator for the six-nation CEMAC bloc.

COBAC appointed Bogni Ngueya as provisional administrator to oversee Nofia’s operations, improve internal management, and guide its recovery. The measure aims to keep the institution running while rebuilding confidence among clients and financial partners.

The intervention adds to a growing list of troubled microfinance institutions (MFIs) in Cameroon. In recent months, several institutions, including Unics, Ceci, and Cepac Solidarité, have been placed under provisional administration, while Idev was liquidated, leaving thousands of savers uncertain about their deposits.

Regulatory Crackdown

Several factors lie behind the sector’s troubles, mainly COBAC’s tougher regulatory framework. Supervision previously focused on financial ratios, but a 2015 reform broadened oversight to include governance and internal control. Although a grace period ran until 2020, many MFIs continued to show weaknesses in these areas. Since 2021, COBAC has stepped up inspections and now sanctions institutions that fail to comply, even if their balance sheets appear sound.

"Until 2015, supervision was essentially limited to compliance with prudential ratios, and any institution meeting them was considered healthy. However, COBAC found that institutions with seemingly good prudential ratios could be undermined by governance conflicts or failing internal practices, risking collapse at the first sign of trouble," explained David Kengne, an inclusive finance expert and CEO of Microfinance Academy.

As a result, the "2015 reform formally broadened the scope of supervision by integrating governance and significantly strengthening internal control," Kengne continued. "The latter was expanded to include internal audit, as well as three strict areas: operational control, compliance control, and risk management. After a grace period until 2020 for institutions to comply, COBAC stepped up its controls starting in 2021."

Systemic Risks

Although the stated goal is to clean up the sector, COBAC’s corrective measures have rattled thousands of clients. "I was distraught when I heard that Cepac was placed under provisional administration," said a client of Cepac Solidarité, which has been under administration since March 2025. "Since then, I have lived in fear of losing my savings, especially since I have received no information on what happens next. I am truly worried."

The string of failures is particularly concerning as it hits the core of the CEMAC microfinance sector. According to the Bank of Central African States (BEAC), Cameroon alone accounts for nearly three-quarters of the region’s 521 licensed microfinance institutions (384 establishments).

That concentration has also become a vulnerability. BEAC data show that non-performing loans in the sector climbed to 178 billion CFA francs ($316 million) in 2024, up nearly 9% from 164 billion CFA francs the previous year. Cameroon accounts for 81% of these bad loans, about 144 billion CFA francs, far ahead of Congo (9%) and Gabon (7%). The figures highlight the fragility of a market whose difficulties could easily spill over to its neighbors.

Facing growing public anxiety and shaken confidence, industry specialists are urging calm. David Kuété, a chartered financial expert and liquidator in Douala, Cameroon, said the sanctions are necessary to prevent a broader collapse that could be far more damaging to savers. Specialists are urging MFIs to comply promptly by training administrators, updating business plans, and enforcing anti-money laundering and counter-terrorist financing rules.

Sandrine Gaingne