(Business in Cameroon) – The average effective interest rate on SME loans in the Cemac zone surged from 11.41% to 23.34% between Q1 and Q2 2025.
- The overall average effective interest rate across all borrowers rose from 10.21% to 11.80% in the same period, according to BEAC’s latest monetary policy report.
- Large companies benefited from a decline in rates, showing banks’ continued preference for low-risk clients.
The cost of bank credit rose sharply across the Economic and Monetary Community of Central Africa (Cemac)—comprising Cameroon, Congo, Gabon, Equatorial Guinea, Chad, and the Central African Republic—between the first and second quarters of 2025.
According to the latest monetary policy report from the Bank of Central African States (BEAC), the average effective interest rate, which includes gross interest plus fees and commissions, climbed from 10.21% in Q1 to 11.80% in Q2.
The increase hit small and medium-sized enterprises (SMEs) hardest. Their average effective borrowing rate nearly doubled, jumping from 11.41% to 23.34% quarter-on-quarter.
In comparison, household lending rates saw a milder rise, moving from 14.93% to 15.39%.
BEAC attributed the surge for SMEs to banks’ heightened risk aversion toward this segment, which is often perceived as less reliable due to weak governance, insufficient guarantees, and limited credit history.
Large corporations, by contrast, continued to secure financing under relatively stable and favorable conditions. Their average effective rate eased slightly to 8.77% from 9.31%, reflecting banks’ confidence in well-established borrowers.
This divergence underscores a structural imbalance in credit allocation, where the most dynamic but vulnerable businesses—SMEs—face prohibitive costs, while major firms retain access to cheaper capital.
The widening credit gap could hamper private investment and job creation in the Cemac region. High financing costs constrain SMEs’ ability to expand, innovate, or hire, limiting their contribution to growth.
Conversely, stable lending conditions for large companies highlight banks’ ongoing preference for low-risk clients and established enterprises.
The challenge for Cemac’s financial authorities and governments will be to design policies that reduce SME borrowing costs, promote credit diversification, and broaden access to financing to strengthen the regional economy.
This article was initially published in French by BRM
Adapted in English by Ange Jason Quenum
