Abstract
Rationale: It is now an accepted fact that many developing countries in sub-Saharan Africa (SSA) have realised the importance of tourism as a key local economic development strategy and are actively promoting and encouraging its development. However, the majority of the touristic sites in Central African countries and Cameroon in particular are nature related and located in remote and often inaccessible national parks and other protected sites with very limited hard and soft infrastructure (Kimbu, 2011a). In addition, the local communities often lack the knowledge and capital to successfully develop and manage these sites, some of which are UNESCO World Heritage Sites and MAB reserves. The few who have the necessary skills and are interested to go into the tourism sector are often plagued by the lack of investment or start-up capital (Kimbu, 2011b). This is primarily due to the fact that most government incentives are aimed at attracting Foreign Direct Investments (FDI) from foreign tour operators rather than encouraging and promoting the creation and expansion of local (domestic) tourism enterprises and businesses which are predominantly micro, small and medium size enterprises (MSMEs) in many developing countries. This situation was no different in Cameroon where, more than 90% of travel, tourism and hospitality operations were MSMEs, more than 80% of which were family owned and managed (Kimbu, 2010). One of the principal challenges of these local tourism SMEs is therefore the lack of investment and/or start-up capital, access to credit facilities as well as little financial support from national, regional and local governments. The growth of micro-finance institutions (MFI) in many SSA countries during the last decade has greatly increased the accessibility of small businesses to financial services especially in terms of credits, savings and loan facilities (IFC, 2010). This has empowered many citizens who have capitalised on the new found opportunities and expanded or started up their own businesses thereby contributing to poverty alleviation and local economic development. However, because tourism is still a relatively ‘young and unknown’ industry in the countries of the Central African sub-region such as Cameroon (with its development only recently being prioritised), micro-finance institutions have been wary of providing financial services to potential start-up investors in the sector (Kimbu, 2010). As a result even though other economic sectors have profited from the growth of micro-finance institutions during the last decade, the tourism industry has not benefitted because it is still looked upon with a lot of scepticism by MFIs. Consequently finance/capital or the lack thereof remains one of the main drawbacks of tourism development in Cameroon. Objectives: • Analyse the present contribution of MFIs to tourism micro, small and medium size enterprise (MSME) development in Central African countries and Cameroon in particular. • Propose a model which makes use of existing and deeply embedded and social and cultural capital in the co-creation of investment/start-up financial capital for tourism MSMEs in emerging tourism destinations such as Cameroon. Conceptual Framework: Initially microfinance generation theories are used to explore the present situation i.e. the organisation, functioning and viability of MFIs (in SSA and Cameroon which is used as the case study) in generating capital for local economic development (LED) in general and tourism development in particular. This is followed by an examination of cultural affinity theories (Cheptea, 2007) and personalised socio-cultural (network) theories (Carlsson 2000; Granovetter, 2005), and how these concepts could be transformed into social capital through Home Town Associations (HTAs) (Evans, 2010; Feldman-Savelsberg & Ndonkou, 2010) as well as Rotating (and nonrotating) Savings and Credit Associations (ROSCAS) (Low, 1995). These associations which are predominantly informal could serve as platforms for the generation of capital needed for tourism development. Based on these theories and in conjunction with the study findings, a model is developed which if successfully implemented could generate and facilitate access to financial capital for tourism businesses in SSA countries like Cameroon where informal social and cultural networks still play a crucial role in regulating daily life. Methods: Secondary data analysis of key industry statistics of MFIs in Cameroon with the goal of understanding and highlighting the volume and direction of flow of savings and loans provided by institutions to SMEs. This information came from public and private sector institutions involved in managing and regulating financial operations in Cameroon. Primary data came from 20 semi-structured interviews with private and public sector stakeholders drawn from Cameroon’s financial, tourism and LED sectors. This included government representatives, tour/travel agents, economic operators owning/working in MFIs, community groups and non-governmental organisations engaged in sustainable (tourism) development activities at national, regional and community levels in Cameroon. In addition, 15 focus group discussions were held with HTAs and ROSCAs in the towns of Yaounde, Douala, Bamenda, Buea, and Wum in Cameroon. Questions during these discussions focused on the role, efficiency, opportunities and challenges presented by formal & informal MFIs in generating capital for micro and small enterprise tourism establishments and LED in Cameroon. Other questions examined the challenges and properties that characterized the relationships among the different set of actors with emphasis on their participation and/or non-participation in tourism ventures and the reasons thereof especially from a financial perspective.