Pretending to Be Poor: Borrowing to Escape Forced Solidarity in Cameroon

The article discusses the importance of excess borrowing in credit cooperatives in Cameroon, examining the ethnographic evidence based on interviews made with some members. Each cooperative is composed of 200-700 members, out of which about one-third can be considered active. There are, on average, 266 active members per cooperative. Each cooperative offers to its members two types of financial services: savings accounts and credit. The conditions to obtain a credit are rather strict. First, the amount borrowed cannot exceed three to five times the total amount of the savings account. A substantial number of members take loans even though they have enough liquidity in their savings account in the same institution. Nineteen percent of the loans observed fall into this category. The net interest paid for this strategy is equal to 24% per year. In-depth interviews with members of the cooperatives suggest a new possible rationale for this behavior.