Analysis Of The Impact Of Microfinance On The Economic Development Of CEMAC States

Financial system has a positive impact on economic development of countries. Thus the main objective of this paper is to stress the role of financial system on economic development of Economic and Monetary Community of Central Africa, EMCCA(Communauté Economique Monétaire de l’Afrique Centrale, CEMAC) countries, mainly the role of MFIs through savings mobilization function and micro credits. To achieve this goal, we have considered that financial system consists of banking system and microfinance institutions.The financial system of CEMAC is dominated by the formal financial system, namely the banking system. During the period before independence, the authorities have carried out the nationalization of financial institutions inherited from colonization and the establishment of new banks. They maintained control over interest rates to minimize the cost of credit to public enterprises and certain priority areas. However, the intervention of the authorities did not give good results. This led CEMAC to liberalize its financial system for the purpose of enhancing the mobilization of savings and reallocation of resources to boast economic development and microfinance emerged.The analysis revealed that the restructuring of the banking sector has enabled banks in CEMAC countries to have excess liquidity and favor the growth of microfinance institutions(MFIs). However banks contribution to the financing of economic activities remain limited, thus MFIs have increase their activities and contribute to the financing of poor population mainly from rural areas where banks are absents. The study made some recommendations mainly the development of banking system and the improvement of microfinance services to sustain economic development in CEMAC in general and in Central African Republic in particular.