There is a small business somewhere in Cameroon that has existed for ten years without ever really becoming "a company." It has customers, employees, suppliers, and perhaps millions of francs passing through it every year, yet legally it still exists almost entirely around the person who owns it.

And if that owner needs FCFA 500,000 tomorrow, chances are the first place they think about is not a bank. It is the njangi, maybe a credit union, or maybe a brother abroad, or maybe a supplier who trusts them enough to give market goods on credit.

And increasingly, maybe the answer is sitting somewhere inside their mobile-money history.

This is why the conversation about formalizing African businesses is more complicated than simply telling entrepreneurs to register their business. Many small businesses have already built financial systems around themselves, and those systems work well enough to keep them alive.

Cameroon has a particularly deep culture of njangi, or tontines in Francophone communities. Academic research describes these rotating savings groups as one of the country’s most common informal financing arrangements, where members contribute regularly and either take turns receiving the accumulated money or borrow from the common pool.

For generations, this has allowed traders and small business owners to access capital without collateral, paperwork, or a bank manager deciding whether they are worthy of credit.

That system survives for a reason.

The woman selling dresses in Bamenda may not have audited accounts, but twenty women in her njangi have watched her contribute every Sunday for seven years. They know where her shop is, know her children, and know whether she repays her debts. A commercial bank may see insufficient documentation; her njangi sees a credit history written in human relationships.

Credit unions occupy another important space between that world and conventional banking. They have historically allowed people to save and borrow within communities where relationships, membership, and accumulated savings can matter more than the formal requirements associated with commercial banks. For many small entrepreneurs, the journey toward formal finance therefore does not begin at a bank branch. It begins inside institutions they already trust.

The problem comes when the business begins wanting opportunities larger than the financial system surrounding it. Even formal Cameroonian businesses struggle with credit. In the World Bank’s 2024 Enterprise Survey, access to finance was the most frequently identified biggest obstacle among 615 formal businesses surveyed, cited by 28.8 percent of respondents. Almost half described financing as either a major or very severe obstacle.

Now imagine approaching that same system without reliable accounts, registration documents, or a financial history belonging to the business rather than its owner.

Njangi can help you restock. A credit union may help you buy another freezer. A supplier's credit may carry you through December. But eventually you may want FCFA 50 million rather than FCFA 500,000, and then you realize relationships alone become harder to scale.

That is where informality becomes expensive.

The same business that avoided registration because customers were already buying may later discover that a larger company requires tax documents before becoming a supplier. A government grant may require registration records, while a potential investor may ask for financial statements, ownership documents, and contracts that simply do not exist.

The business man saved money by remaining outside the system but unknowingly also placed a ceiling above the business.

Every Momo merchant payment received, transfer made, and transaction completed can potentially tell a story about economic activity. The trader may still have no conventional bank account worthy of a loan officer’s attention, but the phone in her hand increasingly knows something about how money moves through her life.

Perhaps that is where the future of small-business finance becomes interesting.

Formalization should not mean destroying njangi, credit unions, or the systems people already trust. Those institutions solved problems long before fintech founders gave the problems fashionable names. The opportunity may instead be connecting those informal histories to formal opportunity.

So staying informal can genuinely feel like survival.

But what keeps a business alive at one stage can prevent it from becoming something larger at another.

If the ambition is to build something that can borrow bigger, partner wider, attract investment, and eventually exist without you, the business must at some point become more than the person carrying it.

Informality can be an excellent place to begin.

It becomes dangerous when you mistake it for the destination.