(Business in Cameroon) – The Cameroonian government signed an agency agreement yesterday in Yaoundé with Afriland First Bank. They plan to launch a new credit line of $22.2 million, or over CFA13 billion to support the post-COVID recovery of local SMEs.
Alamine Ousmane Mey, the Minister of Economy, Planning, and Regional Development, and Célestin Guela Simo, the CEO of Afriland First Bank inked the document. This new financing is part of the Islamic Development Bank’s (IsDB) Strategic Preparedness and Response Program (SPRP). The latter provides urgent financial and technical support to member countries to help them respond quickly and effectively to the pandemic and restart economic growth.
“The goal is to provide SMEs with financing to boost their competitiveness, acquire equipment, and support wealth creation. This will help reduce poverty and unemployment. Implementing this financing in line with Islamic finance principles required an ‘agency contract’. I commend Afriland First Bank for meeting the requirements of this type of contract through its Islamic window, which allows us to sign this agreement today,” said Minister Mey. He stressed that the project aligns with the National Development Strategy (SND30), aimed at structurally transforming the Cameroonian economy and strengthening import substitution policies.
Célestin Guela Simo expressed his satisfaction with the agreement, stating that operations will adhere to Islamic finance principles, which align with Afriland First Bank’s values of ethics, transparency, and sharing.
The COVID-19 pandemic triggered an unprecedented global economic crisis, severely impacting developing countries like Cameroon. In 2020, this crisis led to a recession that heavily affected SMEs, which are crucial to Cameroon’s economy. According to data from the Ministry of SMEs, about 90% of these businesses were affected, causing slowed activities and staff layoffs. To address this crisis, exceptional budgetary and monetary measures were put in place. The IDB launched its SPRP, enabling Cameroon to receive an initial support of $27.44 million, roughly CFA16 billion, to fund health responses and revive economic activity. The new $22.2 million funding represents the second phase of this plan and will assist businesses most impacted by the health crisis.
This financial support complements aid already provided by other international financial institutions such as the Arab Bank for Economic Development in Africa (BADEA) and the European Investment Bank (EIB), as well as local banks like BGFIBank and Société Générale. These efforts aim to help Cameroonian SMEs overcome the challenges posed by the pandemic and accelerate economic recovery.
