Financial Institutions Urged To Provide SMEs With Collateral Securities Loans

Panellists discussing the stakes, challenges and prospects of the Cameroonian banking system

Panellists discussing the stakes, challenges and prospects of the Cameroonian banking system

By Annie Babelle Odounlami

The Minister of Finance, Louis Paul Motaze, has called on financial institutions to provide loans to Small and Medium-sized Enterprises, SMEs, after a proper judgement of their projects and valuable collateral security worth reimbursing the loan.

He made the plea on Monday, December 6, while presiding over the official launch of the Bank Week, held under the theme: “The bank and the challenges of development in Cameroon”, organised by the Professional Association of Credit Institutions of Cameroon, APECCAM.

The event that brought together actors of the Cameroonian banking sector aimed to address the challenges of the economic development of Cameroon related to the banking system, by promoting financial inclusion.

“First of all, I want to mention the guarantees that we now want to give because one of the links in the system of financing the economy is the guarantee. Many banks lend to SMEs, it is not that they don’t want to lend, the banks need to have guarantees, especially repayment guarantees. Two or three years ago, the government tabled a bill that was passed to punish refusal to repay,” Minister Motaze said.

He furthered: “If an economic agent needs a loan, and the bank finds his project interesting, the bank can tell us, but the bank can also tell us what kind of guarantee they want, and at that moment, the state gives the guarantee and that allows the bank to finance the project”.

Going by Alphonse Nafack, APECCAM President, despite the continuous growth in outstanding loans standing at FCFA 3,443 billion in 2020, the loss ratio remains very high at 16.4% in the same year.

Also, bank loans doubled during this period, rising from FCFA 1,382.3 billion in 2010 to FCFA 3,443.7 billion in 2020. Amidst the high loss ratio of bank loans which reached 16.6%, the banking system in an often hostile environment remained resilient and solid.

On his part, the Chief Executive Officer of the Société Générale of Cameroon, Nicolas Pichou, mentioned that, for more than five years, they have been offering e-banking products for professional clients, individuals as well as SMEs both in terms of consulting and transacting, of which 95 percent of domestic transfers are initiated from an e-banking application.

He furthered that they are the first bank in Cameroon with 250,000 individual customers, 10,000 corporate customers, and 700,000 wallet holders of their YUP mobile money. Today, he added: “More than 90,000 individual customers and 6,000 companies use our digital products and we have more than 20,000 unique users per week.”

To him, innovation is permanent and multi-dimensional in their activities as digital transformation is well accumulated amongst their Cameroonian customers as they support a well-engaged movement.

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