(Business in Cameroon) – Five years after the Central African Stock Exchange (BVMAC) was launched, microfinance institutions (MFIs) still struggle to list on the exchange. As a result, they have fewer opportunities than listed companies to raise funds and effectively support the regional economy. This is the main takeaway from a gathering of experts in Douala on September 26, 2024. The event was organized by Kori Asset Management, an asset management firm.
According to BVMAC data, around CFA 14 trillion in idle capital exists in CEMAC but remains underutilized. “This cash, if effectively directed toward the markets, could stimulate and accelerate regional development through debt mechanisms,” stated Patrick Fomethe, CEO of Kori Asset Management.
MFIs cite several reasons for their hesitation to go public. They mention a lack of information, the complexity of the process, and perceived high compliance requirements. Other factors include the prohibitive cost of going public, which requires substantial resources to cover expenses for intermediaries and service providers, such as marketing agencies, accountants, and financial advisors.
The 2023 report from the BEAC highlights overall improvements in the microfinance sector in the region. The balance sheets of the 450 active MFIs increased by 23.4%, reaching CFA 1,755.6 billion in 2022. Client deposits and loans to the economy also saw significant growth. However, despite this progress, challenges remain, particularly in governance and organizational upgrades.
Going public requires deep structural and organizational changes. This includes establishing sophisticated internal control systems and building experienced management teams with strong resumes. Publicly listed companies must comply with strict legal obligations regarding transparency, such as regularly publishing financial results and communicating all aspects of their activities through press releases. To date, few MFIs meet these requirements.
