[Development fund for Africa --] impact evaluation of the Cameroon credit union development project

The review determined that the credit union model promoted under project auspices is appropriate for Cameroon's rural development needs and presents good prospects for replication in other countries and regions. A.I.D.'s support has been timely and appropriate. The project's impressive implementation record can be attributed in large part to the cooperating entity's strong management and to A.I.D.'s willingness to make a commitment far exceeding the traditional life of project cycle. Also contributing to the project's success has been the apparent compatibility between the credit union model and traditional Cameroonian values, institutions, and economic orientations. In providing institutional development assistance, A.I.D. has contributed to the creation of an effective financial intermediary which is bridging the gap in financial markets between rural and urban areas, and providing services complementary to those in the informal and formal sectors. The CCCUL has made an important contribution to the quality of life of its rural and market town members by: mobilizing financial resources that might have otherwise remained outside the formal system; providing secure and interest bearing depository for mobilized savings; and financing members' production activities, health, education and housing needs, and business and consumer demands. The project has had only limited success promoting investment in agricultural technology and small enterprise development. On the other hand, it has avoided the pitfalls of economic activities not generated by market demand. The current productive lending activities of the CCCUL and its affiliates tend to finance building activities which are a form of capital accumulation and a possible hedge against inflation. Health and education loans are an important source of demand for credit-union financed borrowing. The continuing decline in the demand for agricultural credit may be more a function of limited technology and commodity pricing than the credit union system's ability to generate and deliver productive credit. Problems remain. Loan delinquencies in many credit unions are at unacceptable levels. Other unions have failed to observe credit union guidance and good commercial practices in the execution of their credit policy. External pressures from political and economic elites to interfere with democratic policymaking within the credit unions has had a detrimental effect on certain younger institutions and those located in the French-speaking provinces. The CCCUL will be expected to improve the quality of the services its provides its affiliates while gathering new unions into itself. All this will undertaken in a national economic situation that is becoming increasingly problematic. (Author abstract, modified)