A Beac report on the evolution of lending rates within the Cemac region showed that big companies received 63.5% of banking credit granted in H2 2018. This means SMEs and Individuals only captured 36.5% of funds.

In detail, Small- and Mid-size Enterprises which however represent most of the region’s industrial fabric only received 18.8% of financing over the period reviewed. “Individuals absorbed only 8.47% of total amounts receiving XAF406.4 billion. This figure which remains weak is however higher than the XAF239.16 billion (5.31% of new credits) individuals received during the first half 2018,” Beac says.

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Credits granted in H2 2018 within the Cemac area grew to nearly XAF4,797 billion, up XAF297 billion (+6.59%) from the first half, a Beac report says.

According to the document, Cameroon and Gabon were top providers granting about 87% of the total amount. XAF2,887 billion, or 60% of monies, was from the first country while the second granted 27% or XAF1,302 billion. Congo and Chad accounted for 7% and 3%, respectively, followed by E. Guinea (2%) and CAR (1%). Most of the funds (99.33%) were provided by banks ; this represents XAF4,465 billion. The 7 non-bank financial institutions identified in the region accounted only for 0.67% (XAF32 billion) of total credit granted over the period reviewed.

Beac indicated that the uptick in the H2 2018 was linked to seasonal increase in demand for credits due to year-end holidays and school loans. Yet, the Central Bank says whole-year credit activity was down 6.07% compared to 2017. Total 2018 credit amounted to XAF9,297 billion against XAF9,897 billion the previous year.

Sylvain Andzongo

The Guinean arm of Cameroonian credit institution Afriland First Bank signed April 16 in Conakry a partnership agreement with the UN Development Program (UNDP), we learnt.

The agreement is part of a project which aims to increase financing for vulnerable people. It will ease access to financing for youth, women, the disabled and other vulnerable people thanks to pulled efforts from the two sides. It also plans strengthened inclusive financing, innovative solutions to support and finance promising segments in key sectors such as agriculture, fishery, craft, development minerals and ICTs.

Further, the partnership sees, in the long run, the implementation of actions to reduce credit cost through the pooling of risks; capacity building for youth, women, the disabled and other vulnerable people, mainly through financial education which will provide them with capacities for better management of financing and income, to reduce credit risk.

Brice R. Mbodiam

The Development Bank of Central African States (Bdeac) achieved bullish performances in 2018 compared to the previous year with earnings up XAF8.7 billion from XAF2.3 billion to more than XAF11 billion.

The bank says figures “increased fivefold, translating good performances of the bank’s portfolio and transactions in 2018 as well as good control of operating costs.” Over the period reviewed, key management indicators were very dynamic and the bank's operating margin reached XAF19.401 billion against XAF14.103 billion in 2017, up 24%. Operating result also more than doubled between the two periods from XAF3.082 billion to XAF8.469 billion.

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The decline in interest rates compounded with increased costs of risk could significantly affect the net income of Cameroonian banks in 2018. Assumption is based on the escalation of competition between the financial institutions on a market still small though bancarization rate improved.

A recent document from the National Credit Council shows that the overall effective rates on banking loans granted by banks fell in all customer segments (individuals, SMEs, large corporations and the State) at the end of H1 2018. Plus, Beac revealed in its supplementary monetary policy report that the cost of risk has increased within the Cemac zone driven by higher bad debts (+21%).

Not all audited accounts for FY2018 were made public thus any comparison with FY2017 is not yet possible. However, banks achieved a net profit of XAF71.5 billion in 2017, up 266.2% from the previous year. This feat was made possible thanks to the improvement in banking operating income, mainly. In a context where interest rates are much higher than funding costs, margins generated on customer services were solid, reaching XAF178.2 billion.

The top three most profitable banks in 2017 were Société Générale Cameroun (XAF11.9 billion), SCB Cameroun (XAF10.8 billion) and Bicec (XAF9.5 billion).

Idriss Linge

Cameroonian Madiba Olivier achieved further feats with his Kiro’o Games startup, the first video game studio in francophone Africa. Since the young company opened its capital April 4, 2019, it raised $174,000, or XAF101.01 million. Monies were mobilized on April 16.

“Within 12 days we mobilized $174,000 from private investors,” said CEO Olivier Madiba.

“Beyond money, Kiro’o will only select investors who fit our vision. We even carry out stringent due diligence on investors’ sources of incomes,” added co-founder Jean-Yves Bassangna.

The two executives explained the company used its “Equity Crowdfunding Rebuntu” that enables funders to acquire shares with a minimum of $500 (about XAF275,000). Every new shareholder has a right to vote and could thus participate in the company’s management via a dedicated intranet. Fundraising is still open and the company plans to end it in June this year.

Rebecca Enonchong, a major player of tech segment in francophone Africa, is a lead investor of the operation through her -Cameroon Angels Networks- a group of angel investors. In addition to its Equity Crowdfunding Rebuntu method, Kiro’o Games says it also uses other classic fundraising techniques.  

Let’s note the company was hailed by the Bank of Central African States Beac in a 2018 report on crowdfunding in the Cemac. This followed a crowdfunding that saw the startup raise XAF129.87 million (€198,000) to finance the biggest video game project of francophone Africa without prior real property guarantees, proven experience or even proper customer base.

SA

The primary market for government securities issued through bidding in the Cemac zone has been dynamic over the past year. According to the Bank of Central African States Beac, volume of issues increased significantly to XAF1,648.8 billion in 2018 from XAF878.7 billion in 2017, up by about 87.6%.

A total of 156 tenders were registered including XAF1,538.1 billion in Treasury bills (BTAs) and only XAF110.7 billion in fungible treasury bonds (OTAs).

With a volume of XAF629 billion in issues, Gabon was the largest borrower on the market (BTA segment) in 2018, followed by Chad with XAF416.6 billion. Cameroon came third with XAF287 billion. Other players include Equatorial Guinea (XAF114 billion), Congo (XAF72.5 billion) and the Central African Republic (XAF19 billion).

On the fungible treasury bonds (OTAs) side, only Gabon raised funds (XAF110.7 billion) through 10 issues.

S.A

As at December 31, 2018, Ecobank Cameroon posted a net result of XAF7.6 billion, an increase by 28% compared to the previous year.

The good performance is backed by operational efficiency with cost savings of more than XAF2.9 billion in 2018 compared to 2017. In addition, the bank has also been able to save costs by strengthening its digital strategy. Operating ratio fell from 56.98% in 2017 to 47.1% in 2018.

The bank says it will continue to strengthen its digital strategy to support its position as a digitalization leader in Cameroon. It hopes to further improve the average return on equity, which increased from 37.2% in 2017 to 40.2% in 2018.

By September 2018, Ecobank Cameroon was already considered the second most profitable subsidiary of the pan-African banking group Ecobank Transnational Incorporated, out of 18 in the Central, Eastern and Southern Africa zone; the first being the Zimbabwean branch.

S.A

During a Board meeting held April 2 in Douala, Cameroon’s economic capital, the Bank of Central African States Beac raised concern about the scarcity of coins in the sub-region, especially in Cameroon.

In order to tackle this issue, the Board instructed the bank to take steps with the CEMAC countries to ban the use of coins in gaming rooms and, on the other hand, to define a multi-year plan for making coins available to the population, according to the final communique.

In fact, expatriates, especially Asians, who own game rooms in Cameroon and other Cemac states shipped XAF50 and XAF100 coins out of the country through slot machines and recycled them into jewelry. Last December 18, Abbas Mahamat Tolli, Governor of Beac, already promised to open an investigation into the phenomenon.

Sylvain Andzongo

Beac’s gold reserves at the end of 2018 stood at 201.865 oz as in 2017 but value increased from XAF142.9 billion to XAF147.8 billion between the two periods, an improvement by XAF4.9 billion.

According to the bank, the rise in reserve value followed an increase by 4% in world gold prices. Prices were €1,117 per oz in 2018, up €43 compared to the €1,074 in 2017.

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