(Business in Cameroon) – Cameroon plans to set up a guarantee fund to support SMEs, projects initiated by young people, and ultimately fight unemployment. The announcement was made by President Paul Biya during the 2022 edition of the traditional February 10 address to the youth on the eve of Youth day.
“(…) I am aware that the main obstacle in this regard [ ed. note: in curbing the unemployment trend ] has always been access to the most common funding for small and medium-sized enterprises. That is why, in the short term, the Government plans to mobilize specific national, bilateral, and multilateral funding to support the establishment of a guarantee fund for young entrepreneurs. The said Fund would provide project initiators and start-ups with the requisite guarantee to raise capital from financial markets or obtain financing from traditional banks,” the Head of State explained.
The fund will improve the configuration of the Cameroonian financial sector. Indeed, since the bankruptcy and liquidation of the Small Enterprise Guarantee Fund (FOGAPE) in the 1990s, there is barely any institution to guarantee banks’ risks, notably when it comes to financing SMEs generally poorly structured and fragile. The guarantee fund will play that role, therefore, boosting business financing, for SMEs especially.
In Cameroon, SMEs make up 90% of the economic fabric. They generate nearly 35% of the GDP and provide up to 70% of the jobs. They however capture the lowest bank loans. In the CEMAC zone that has Cameroon as its powerhouse, SMEs captured only 15% of bank loans in the first half of 2019 while large enterprises captured 64.2%, data from the central bank BEAC show.
BRM
