Abstract
Promoting savings and providing a basis for lending to the poor is a growing concern in many developing countries. Cameroon has a culture of savings mobilisation known as njangi/tontine. The njangi is contributions given to members in a rotating form at the end of every sitting, and tontine is voluntary savings held by the group. This study reveals that njangi/tontine groups only lend money to group members and suggests that a micro village bank known as MC2 could be used as guarantor to ensure that group monies lent to non-group members are repaid. Encouragement and improvement in the function of such voluntary savings could promote the creation of small businesses in the country. The Cameroonian government needs to improve fighting corruption and a functional justice system to ensure security.
Highlights
According to Taylor (1992) a great idea is a vital but not the only element of successfully starting and operating a business
Njangi/tontine groups do mobilise capital from a pool, which extends beyond the resources of a single family or individual, and encourage savings, as well as exposing potential investors who can be earmarked for training courses on small business management
This paper has presented and discussed the njangi/tontine system of saving mobilisation in Cameroon
Summary
According to Taylor (1992) a great idea is a vital but not the only element of successfully starting and operating a business. An estimated 70 per cent of the total money supply in the country is held outside the banks in njangi/tontine houses. All big entrepreneurs in the country are thought to have acquired their business start capital from njangi/tontine. The people have to save all available capital for petty and small businesses. This study looks at the organisation, functioning and contribution of sources of funds available to petty and small businesses in Cameroon. The five sources of finance available for small business funding in Cameroon are:. Many small businesses in Cameroon have a financial structure dominated by group savings, since more than 70 per cent of the Cameroon population live in the rural areas with no access to banks and other foreign financial institutions. Each of the five capital sources common in Cameroon can be discussed in more detail
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