(Business in Cameroon) – Short-term loans in the Cemac region accounted for a significant 83.6% of total credit extended to businesses and individuals by commercial banks in Q3 2024. These loans, which typically have maturities of 24 months or less, are mainly used to finance household consumption or to support short-term business cash flow needs.
This heavy reliance on short-term financing is a concern as it does not cater to the region’s investment needs, which require medium- and long-term loans. During the period in question, the share of medium-term loans (with terms between 25 and 60 months) was just 14.53%, while long-term loans (over 60 months) accounted for only 1.87% of the total credit extended.
The report, published by the Bank of Central African States (BEAC), does not explain why banks in Cemac are so focused on short-term loans. However, bankers suggest that this preference is largely due to the nature of bank deposits, most of which are demand deposits, meaning they can be withdrawn at any time. This limits the banks’ ability to offer medium- and long-term loans, which require more stable funding sources.
