Cameroon’s Economic Resilience: A CFA13bn Lifeline for SMEs
In a significant move to bolster the economy in the aftermath of the COVID-19 pandemic, Cameroon has unveiled a new credit line worth CFA13 billion. This initiative is aimed at providing a much-needed boost to small and medium-sized enterprises (SMEs) that have been hit hard by the global crisis.
The Cameroonian government, in collaboration with Afriland First Bank, has signed an agency agreement to launch this credit line, which translates to approximately $22.2 million. This funding is part of the Islamic Development Bank’s Strategic Preparedness and Response Program (SPRP), which offers urgent financial and technical support to member countries to combat the pandemic and kickstart economic growth.
The Minister of Economy, Planning, and Regional Development, Alamine Ousmane Mey, emphasized that the goal is to enhance the competitiveness of SMEs, facilitate the acquisition of equipment, and support wealth creation. This, in turn, is expected to help reduce poverty and unemployment. The financing adheres to Islamic finance principles, requiring an ‘agency contract’ and aligns with the National Development Strategy (SND30), which focuses on transforming the Cameroonian economy and strengthening import substitution policies.
The CEO of Afriland First Bank, Célestin Guela Simo, expressed satisfaction with the agreement, noting that operations will adhere to Islamic finance principles, reflecting the bank’s commitment to ethics, transparency, and sharing.
This financial support is crucial as SMEs constitute the backbone of Cameroon’s economy. Data from the Ministry of SMEs indicates that about 90% of these businesses were affected by the pandemic, leading to slowed activities and staff layoffs. To combat the economic downturn, Cameroon has also received initial support of roughly CFA16 billion from the IDB to fund health responses and revive economic activity.
The new funding represents the second phase of this plan and aims to assist businesses most impacted by the health crisis. It complements aid provided by other international financial institutions and local banks, all working towards helping Cameroonian SMEs overcome the challenges posed by the pandemic and accelerate economic recovery.
The unveiling of the CFA13bn credit line is a testament to the Cameroonian government’s commitment to supporting SMEs during these challenging times. It is a strategic step towards ensuring the long-term sustainability and growth of the nation’s economy.
For more detailed information on this initiative, you can follow the developments on Business in Cameroon’s website.
