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Yaoundé - 26 September 2021 -
Finance

SMEs’ financing: I&P steps up efforts to boost private equity mechanism in Cameroon

SMEs’ financing: I&P steps up efforts to boost private equity mechanism in Cameroon
  • Comments   -   Tuesday, 27 July 2021 12:24

(Business in Cameroon) - In its about 20 years of existence, Investisseurs et Partenaires (I&P) has funded 170 SMEs in Afica . However, only a dozen of those SMEs are in Cameroon where 90% of the economic fabric is made up of SMEs. Therefore, the I&P believes that it still has significant works to do in the country.  

To get those things done, in February 2021, the firm, which has been operating in Cameroon since 2012, created a Deputy CEO position. The new deputy CEO, in the person of Cameroonian Vivian Tchatchueng, will oversee the firm’s national portfolio development strategy in Cameroon.

Before he was appointed the Deputy CEO of I&P Cameroon, Vivian Tchachueng was an I&P investment manager in Central Africa. The industrial Engineer has over 10 years of experience in the West and Central African private equity scene. He will implement strategies to add new SMEs to I&P Cameroon’s portfolio currently constituted of Pigier Cameroun, Carrières du Moungo, Cameroun Breuvage, Kawtal, Genemark, Acep Cameroun, ITG Store, and Biotropical.

Sensitization

For Vivian Tchatchueng, one of the portfolio-boosting strategies is sensitization, to democratize private equity. As he explains, local Cameroonian entrepreneurs are not aware of private equity funding. Yet, it is the most adapted funding mechanism for them.

"The conventional funding system offers many solutions for operating funds but, it does not offer support for the SMEs’ organizational and managerial transformation. Private equity offers the possibility to fund medium and long-term investments but it also helps SMEs improve their management, corporate structure, and operations. This is why I believe this funding mechanism is crucial and more suitable for SMEs in Cameroon," explains the man who has multiplied sensitization actions in recent months.

Numerous roadblocks

The latest of those sensitization actions is the meeting organized in Douala, on July 21, 2021, to meet with entrepreneurs. The issue discussed was the possessiveness of Cameroonian entrepreneurs who are reluctant to open their capitals to third parties and share business risks with the latter. "The operating principle of private equity firms is to take stakeholding or shares in companies to efficiently implement their funding-support models in those companies," he explained to the participants. "We are not planning to assume control of the companies we support. We always take minority shareholding and resell them after five years in companies’ capital," he added to reassure the entrepreneurs.

Nonetheless, communication will not be enough to suppress the numerous obstacles faced by private equity in Cameroon, I&P thinks. So, it suggests the business environment should be improved while more private equity funds targeting SMEs enter the market. Also, the structuration of some industries needs to be enhanced, the informal sector managed, and the variability of the tax system addressed. Those suggestions are a solicitation for state support for the development of this funding mechanism in Cameroon.

Aboudi Ottou

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