(Business in Cameroon) - The International Finance Corporation (IFC), the private arm of the World Bank, announced Tuesday it has granted a loan of $3.2 million (a little more than CFA2 billion) to the Cameroon Equipment Corporation (SCE). The beneficiary will use the resources to increase financing for Cameroonian SMEs through leasing, we learned.
Initially, SCE only granted its clients credits for the purchase of goods and small domestic equipment, but the company has entered the leasing segment since 2016. The company is now the 2nd largest leasing institution in Cameroon.
Leasing is seen by IFC experts as a more flexible business financing technique than traditional bank credit. The loan to SCE, which comes with advisory services to help the Cameroonian private company improve its governance, is part of a three-year program to promote leasing in Africa. Three other Ohada countries (Burkina Faso, Côte d'Ivoire, and Gabon) will benefit from the program.
An under-exploited potential
IFC explained that only a quarter of SMEs in Cameroon have access to a loan or a credit line. Most of these companies do not have the guarantees and credit history required by the banks, the institution said. Leasing thus appears to be an ideal solution to reverse this trend, insofar as it "allows companies to acquire the equipment or vehicles they need to grow at affordable conditions, without having to buy them directly.”
IFC said in a recent study that the leasing segment is still under-exploited in the country, although the amounts secured by companies under leasing have almost tripled between 2009 and 2016, from CFA45 billion to about CFA125 billion (against CFA134 billion between 2018 and July 2021, ed). The leasing market potential in the country is estimated at CFA400 billion by the Cameroon Leasing Association (Camlease).
To fully achieve this potential, operators suggest that offers are diversified. According to Afriland First Bank, one of the country's leading leasing companies, the market is still dominated by the acquisition of rolling stock for companies, which accounts for up to 90% of the operators' portfolio.
Brice R. Mbodiam