(Business in Cameroon) - On February 16th, in Nairobi, Kenya, the African Guarantee Fund-AGF (a fund aimed at unlocking the potential of African SMEs), signed an agreement to grant a XAF5 billion credit line to allow Cameroonian banker Afriland First Bank to support SMEs, women's entrepreneurship and the green economy in Cameroon.
According to Alphonse Nafack (Managing Director of Afriland First Bank) and Jules Ngankam (CEO of AGF) thanks to the credit line, Afriland First Bank will provide more loans to SMEs and SMIs, as well as promote the development of green entrepreneurship and women's leadership in the Cameroonian business community.
"Banks across the continent urgently need risk hedging instruments to support their SME lending activities. This agreement confirms our commitment to Cameroonian SMEs alongside Afriland First Bank, a leading institution in the Cameroonian banking sector," said Jules Ngankam.
"This partnership is in line with Afriland First Bank’s mission and demonstrates the strong commitment that has guided our daily action since our inception, namely to support the entrepreneur, promote SMEs, and support companies in their development programs," indicates Alphonse Nafack.
The agreement is signed in a context where SMEs (known to be major actors in the Cameroonian economic space) are facing enormous problems in accessing bank financing necessary for their expansion. According to the National Institute for Statistics (INS), Cameroonian SMEs, which generate 35% of GDP and provide 70% of the country's jobs, regularly encounter financing problems. Those problems are caused by the accumulation of high unpaid debts and credit access difficulties mainly.
Afriland First Bank claims to have granted over XAF150 billion credit to VSE/SME/SMIs in 2020, with over XAF675 billion of outstanding credit. The credit institution says that thanks to the new agreement, it will be able to boost its commitment to the emergence of local economic champions. However, it does not provide a specific figure as to the volume of credit to be granted to SMEs in the framework of that agreement.