Local commercial banks in Cameroon are frequently criticized for providing minimal financing to small and medium-sized enterprises (SMEs). This criticism persists even as these financial institutions regularly announce strong financial performance, often reporting record profits.
For example, BGFI Bank's Cameroon subsidiary reported an 11 billion CFA francs net profit for 2024, a 9% increase from the previous year. United Bank for Africa's Cameroonian unit posted a 26.5 billion CFA francs net profit, making it the best-performing unit outside Nigeria during the period. Société Générale's subsidiary announced 29.8 billion CFA francs in net profit, Afriland First Bank declared 27 billion CFA francs, and Ecobank reported a net margin of 21 billion CFA francs.
Beyond rising profit margins, the Cameroonian banking system holds ample reserves, which theoretically could inject much-needed credit into the national economy to support growth. As of the end of March 2025, excess reserves held by CEMAC banks, primarily Cameroonian entities, stood at 2,472 billion CFA francs. This amount is 2.25 times the minimum required by the regional banking regulator, suggesting a significant volume of free reserves that should, in principle, support credit expansion.
In practice, however, data from the Bank of Central African States (BEAC) suggest that by the end of March 2025, banks’ net exposure to the state stood at just 1,992.4 billion CFA francs, a decline of 10.3% compared to the same period in 2024. Additionally, net lending to the state accounted for only 32.5% of the total credit to the real economy, which totaled 6,116.3 billion CFA francs. While state credit is falling, private sector lending has increased by 22.4%.
Still, these figures do not hide the persistent problem of SME financing. Across the CEMAC region, SMEs struggle to access funding. When they do secure loans, they often face credit fees and premiums that push effective borrowing rates to between 15% and 17%. As a result, a significant portion of private sector credit benefits only a few large companies, often subsidiaries of multinationals.
Banks Defend Lending Practices
Some in the banking sector push back against the criticism. One industry insider, speaking anonymously, stated that SMEs in CEMAC countries generally struggle to qualify for loans for many reasons. Chief among these is their vulnerability to economic shocks. When such shocks occur, small businesses often face severe disruptions with limited fallback options.
Even under its most optimistic forecasts, the BEAC does not rule out continued effects from current economic shocks, such as the depreciation of the U.S. dollar, which reduces the CFA franc value of foreign earnings. These challenges are compounded by an unpredictable election year and the widespread informality that characterizes many SMEs.
Another major issue is the cost of underwriting SME loans. Information gaps are so wide that significant resources are needed to assess loan viability. According to BEAC sources, work is underway to finalize the establishment of credit bureaus, which would help reduce information asymmetry. Banks also point to an inadequate collateral enforcement system. The CEMAC banking regulator, the Central African Banking Commission (COBAC), requires full provisioning of any unpaid loan after three years, even though the legal process to recover collateral often takes much longer.
These arguments are not without their critics, but the way forward remains open for discussion. It may be unrealistic to expect profit-oriented banks to take on more risk without stronger guarantees or support mechanisms. As of March 31, non-performing loans amounted to 840 billion CFA francs. While these mostly stem from unpaid debts by the state or large firms, it is uncertain that lending to smaller companies would yield better outcomes.
Beyond setting up a regional credit bureau, one potential solution would be to develop a secondary market for bank credit, often called securitization. The momentum seen in the secondary money market between 2024 and 2025 reflects growing interest from commercial banks. Repo transactions and no-fee asset transfers (franco) nearly tripled during the period. However, replicating this for private-sector loans would require further progress in legal infrastructure, data availability, and training.
Idriss Linge