(Business in Cameroon) - On March 31, 2015, the volume of delinquent loans at banks within the Economic Community of Central African States (CEMAC in French) reached 894 billion FCFA, which is 11.8% of gross lending within that period by all banking institutions (around 50). The volume of loans in difficulty increased by around 2% relative to the same period last year (696 billion FCFA or 9.99% of total loans).

This was revealed on July 3, 2015 in Douala by Lucas Abaga Nchama, the president of COBAC and governor of the central bank for CEMAC memer countries. This was announced at the 7^th meeting of the COBAC president and the heads of loan establishments in the CEMAC zone. The event was a kind of discussion platform that enabled the banking regulatory body and those within its jurisdiction to evaluate the banking system in all six CEMAC countries: Cameroon, Gabon, Chad, the Congo, the Central African Republic and Equatorial Guinea.

Although it is not alarming, according to COBAC, the current decline in the CEMAC zone’s bank loans was a primary reason for the meeting. Indeed, COBAC seized the opportunity to present to the bankers a presentation on “the implementation of COBAC regulations concerning the classification, accounting and procurement of credit establishment loans.” The COBAC president indicated that was a current concern “in light of some questions that still concern certain establishments and the incorrect evaluation and inadequate coverage of loan risk by loan establishments.”

Having come into effect on January 1, 2015, Lucas Abaga Nchama indicated that “the new regulation sets the management framework for loan risk, which is th most significant kind of risk that loan establishments in the CEMAC zone face.” The taking into account of this regulatory provision in the policies and procedures implemented by the banks “will be a factor for improving the resilience of your establishments as well as the banking system as a whole,” stated the COBAC president to the bankers.

Despite the delinquent loans, the CEMAC zone’s banking sector remains quite solid and dynamic based on the figures presented on July 3, 2015 in Douala by the COBAC president. “The bank’s reported totals amount to 12.571 trillion FCFA at the end of March. It grew by 8.62% relative to March 31, 2014. The deposits collected followed the same trend, reaching 9.944 trillion FCFA, which is 79.1% of the total which has increased by 6.5% in the annual variation. Gross lending amounted to 7.528 trillion FCFA. This is up by 8.07% compared to March 2014. The Treasury surplus is 3.575 trillion FCFA (28. 4% of the total). This increased by 4.25% relative to 12 months earlier,” revealed Lucas Abaga Nchama.