Sector health assessment

The microfinance sector in Central Africa faces significant challenges, including loan repayment issues and declining profits, as reported by the Central African Banking Commission (COBAC) in its 2025 annual report. The report highlights a decline in the overall health of microfinance institutions across the Economic and Monetary Community of Central Africa (CEMAC).

Institutional classification

According to the SYSCO-EMF system, which was introduced in September 2025, only 17.9 percent of microfinance institutions in CEMAC are classified as "globally healthy." Nearly 48.7 percent are deemed "very fragile," showing a deterioration in the sector's risk profile between September and December 2025.

Credit risk and non-performing loans

Credit risk is a major concern, with non-performing loans totaling 236.8 billion CFA francs (404.3 million USD) as of December 31, 2025. This represents a 33.2 percent increase compared to the previous year and accounts for 20.5 percent of the sector's gross loans.

Profit decline and financial impact

The aggregated net profit of microfinance institutions has sharply declined to 2.4 billion CFA francs as of the end of 2025, a decrease of 89.4 percent compared to 22.5 billion CFA francs in 2024. This drop is attributed to a 47 percent increase in net provisions for credit risk.

Regulatory non-compliance

Many institutions are not meeting prudential standards, with 39 percent failing to meet the coverage ratio for fixed assets and 36 percent exceeding the regulatory limit for exposure to a single client. These issues raise concerns about the sector's stability and compliance with financial regulations.

COBAC's intervention measures

To address these challenges, the COBAC has initiated seven decisions to open provisional administration in the microfinance sector in 2025, affecting 14 institutions. Additionally, five liquidation procedures have been started, reflecting efforts to ensure the sector's stability and protect depositors.