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Formalizing Through Finance: A Case Study with UNICS Open Access

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This paper seeks to analyze the microfinance industry in Yaoundé, Cameroon through the lens of the microfinance institution Unity Co-operative Society (UNICS). The main question guiding this study deals with whether or not UNICS is encouraging a shift to the formal sector through their work with business people. Other questions relating to repayment rates and subsequent economic development also remain pertinent to the information found. Working mostly in the Credit Department at the UNICS Yaoundé Marche Central Branch and with microfinance and economics experts in the area, data was collected through interviews and fieldwork conducted regarding the former questions. In total, it is found that UNICS and microfinance institutions as a whole, seek to encourage formal sector growth through working with business people in the informal and their desire to work with mainly formal sector business people, in some customers causing a shift from the informal to the formal sector. Repayment rates however do not determine the success of any aspect of a customer’s business or encouragement from institutions. And overall, while microfinance does contribute to socioeconomic growth, it is found that microfinance has deviated from its original goal of helping the poor and with the poor being left behind, it is hard for there to be real economic development.

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