MICROCAPITAL BRIEF: Commercial Banks and Microfinance Institutions (MFIs) in the Economic Community of Central African States Required to Raise Capital Reserves to $20m

The Committee of Banking Supervisors of West and Central Africa, an organization that supervises credit establishments and sets prudential banking legislation in western and central Africa, announced earlier this week that starting from 2014, all commercial banks including microfinance institutions (MFIs) in the Economic Community of Central African States (ECCAS), a subsidiary of the African Union [1], will need to have capital reserves of USD 20 million.
The decision was made during the committee’s last meeting in Yaounde, Cameroon. This represents a 400 percent increase from the original requirement of USD 4 million. Idriss Ahmed Idriss, the president of the committee stated that the new requirement would “strengthen the banks and microfinance institutions in Central Africa by raising their required capital reserves.”
[1] About the Economic Community of Central African States:
The Economic Community of Central African States (ECCAS) is an economic community of the African Union which aims to promote collective autonomy, better standards of living and economic. There are 11 member states, including Angola, Burundi, Cameroon, Central African Republic, Chad, Democratic Republic of Congo, Equatorial Guinea, Gabon, Republic of Congo, Rwanda and Sao Tome and Principle.
A group of financial experts has ordered all commercial banks in the Central African Economic and Monetary Community, CEMAC, to raise the minimum amount of their capital reserves.