La Regionale S.A Engages CNPS as Part of its Digital Transformation Plan
La Regionale S.A. (“La Regionale”) and the National Social Security Fund of Cameroon (“CNPS”) have entered into partnership agreement. CNPS is the state agency in charge of social security. Social security started in Cameroon in 1946. The partnership agreement allows La Regionale, as part of its overall financial services activities, to remit social insurance and entitlement payments on behalf of CNPS. La Regionale is headquartered in Cameroon and it is one of the leading and profitable “2nd category” MFI – a licenced deposit-taking financial institution allowed to provide loans and advances to SMEs and individuals. La Regionale is planning to apply for a full commercial banking licence which will allow it to lower its cost of funding, expand its outreach, and provide a broader array of services to its growing customer base.
A key component of La Regionale’s transformation is launching its digital financial services platform. This platform will be integral in the partnership with CNPS as it will permit the institution to handle payments in an efficient manner. Cameroon has a relatively high mobile penetration rate of over 80% but has a very low rate of banking penetration (and thus financial inclusion) of around 10%. Given that CNPS has member-beneficiaries located across the country, this partnership facilitates La Regionale’s growth in outreach (customer base).
As per the agreement, La Regionale is responsible for paying social benefits through its branch network, ensuring proper customer KYC, and ensuring solvency and security in its operations to guarantee uninterrupted social payments. On the other hand, the CNPS is responsible for preparing and availing to La Regionale the complete beneficiaries’ details and documents, required funds necessary for the payments, and grant technical assistance on agreed timelines or whenever deemed necessary.
This partnership is a public-private-partnership and is the key driver towards an improved efficiency and quality of service delivery by the CNPS. Social security is an important step towards the welfare state by improving living and working conditions and protecting the population against uncertainties of the future. It is estimated that only 20% of the global population is effectively covered by one or more social protection benefits while the remaining 80% are left unprotected. La Regionale will benefit directly from a larger customer base which will be making use of their deposit, savings, and loan services they offer.
Verdant Capital is currently raising EUR 10 M of equity capital for La Regionale as part of its application for a full banking licence.