BY NDUMBE BELL GASTON JOSEPH IN DOUALA
The most famous private sector association,GICAM hosted one of Cameroon’s bankers’ associations, APPECAM to launch a new chapter in their relations by sharing experiences on how to make the national economy great again.
Little did anyone know about the coming of the pandemic, which they say, has made things worse. So, now is the time to put their differences aside and look for a common ground or an operational ecosystem where the private sector, the intermediary or the bank and the regulator, can have a more contextual and convivial relationship in terms of access to credit, financing and transfers which in the end seemed to have been blamed on the regulators BEAC or COBAC in the region.
At some point in the session, one could see the creation of a vicious cycle where the customer blamed the bank for introducing cumbersome conditions such as the much discussed rate of transfers locally and internationally while the banks cautioned customers on prudential management and lack of guarantees. Customers also invoked the high rates of financing and hesitation by banks even when they managed to fulfil those conditions. However, the banks explained that they are not given a free hand. They are instructed by the regulators which both the customer and bank described as having introduced very stringent measures.
The GICAM strong man, Celestin Tawamba, in his address had called for an ecosystem to be created that would include stakeholders and the regulators so that transparency can bring back confidence “There must be a certain amount of symmetry and transparency between the customer and the banker. We cannot continue to go on like this because the rate of financing is unacceptable”
Celestin Tawamba argued on why banks in this country or region must readily finance more of state projects even with very little or no guarantees, which bankers disclosed as “risqué sovereign” or state risks and not reverse the trend to boost the economy.
The President of APPECAM, Alphonse Nafack in excerpts of his keynote address stated that APPECAM is a subsect but autonomous organ to GICAM. In other words, they are brothers. History has proven that in the sands of time customers and banks have lived in suspicion “Let us not wash our dirty linen in public but forget the past. What we want from you (big brother) is for us to work together and find solutions or make proposals together”
Nafack furthered explained that the problem or topic of discussion centred on the sourcing of credit or financing of PME, blamed economic squeeze on the pandemic in the CEMAC zone and blamed the regulator for having caused the problem because of the enactment of their accelerated reform package.
He tried to convince SMEs that aside from banks, microfinance institutions can be supportive because BEAC says the financial market includes banks and microfinance institutions.
The stakeholders want a COVID-19 fund for CEMAC as a proposal given that reports from the commission of SMEs show that because of the disastrous weight of financing not only on the socio-economic problems and the pandemic but also the lack of engagement by the State to settle unpaid bills, 14 more enterprises are now in a comatose state to soon face extinction and join hundreds of others that have been shut down.
In a presentation delivered by the Secretary General of APPECAM, the lack of access to credit by banks and debt financing by States constituted a drawback. Other results of their findings according to the National Institute of Statistics revealed that 80 or so of businesses do not run a proper accounting system. In addition, a huge percentage of the population does not have accounts in Banks, among a long list highlighted. The presentation called for the creation of an adequate legal framework taking into consideration the over westernised banking system which they think should be adapted to our business environment in a progressive manner, among others.
APPECAM also called for the competence of the private sector managers to be periodically overhauled in order to improve their management skills at this point in time. APPECAM suggested that to engage in second generation agriculture, about 400 million francs was needed. They informed customers about the African Guaranteed Fund.
The Deputy General Manager of the Union Bank drew the attention of GICAM and APPECAM to propose sectors like that of Agriculture which is the bedrock of the economy as priority to the economy “it is good to have an ecosystem between all the stakeholders including COBAC regulations”.
The GICAM President Celestin Tawamba reiterated and enjoined others to regroup and approach the State for the insertion of procedures that will supply more oxygen to customers. He suggested that because of the financial contributions made by members of local financial associations usually called “njangï” (or “tontin” in French), these can be formalised to play a greater role in financing businesses.
Celestin Tawamba in the presence of their new Executive Director, Aline Valerie Mbono, stated that sources say FCfA 500 billion was offered to banks to facilitate bank credits to customers but since they are made to understand that there islack of access of credits by customers, he insinuated that there must be a problem.
The GICAM President also wanted to know how many banks finance start-ups even with guarantees and no bank owned up, but they finance import-export transactions. So, that was understood as the prevention of the younger generation to start participating in the economy. He urged banks to adjust guarantees to suit various categories of projects and let those laws be followed and executed by all,if possible, in a uniform manner.
In a press briefing GICAM President mentioned that the present rate of financing is unacceptable. “That has to end,” he told the press. He had stated that all these challenges will be tackled on a progressive basis. “It’s not a day’s job,” he continued.