The board of directors of the International Finance Corporation (IFC), an affiliate of World Bank, will deliberate on December 27 on a major loan to the Afriland First Bank, one of Cameroon’s leading banks, managed by billionaire Paul Kammogne Fokam. Local authority estimates say the loan could be as possible as $60 million (about CFA 37.5 billion) and is primarily intended for the development of small and medium-scale enterprises (SMEs) in Cameroon, which constitutes over 99% of the economy.
Considered is a senior unsecured loan with a maximum duration of five years and a possible grace period not exceeding 12 months. Funds to be provided by the IFC amount to a $20 million loan, while the remaining $40 million will be procured through other partner lenders. This will strengthen Afriland First Bank’s capacity to provide long-term finance to Cameroonian SMEs. A minimum of 25 percent of the funds will be allocated for the support of women-owned enterprises. Women entrepreneurs are among the most underdeveloped and least developed sectors in Cameroon. The project is also consistent with the IFC’s initiatives for the empowerment of women and for the increase of economic opportunities for women.
Recent successes notwithstanding, female entrepreneurs in Cameroon face enormous hurdles, and studies by the World Bank and the government report that women lead 23% of the nation’s manufacturing SMEs, despite comprising 51 percent of the population; they own 38% of the nation’s businesses. Other than the loan, the project might secure an additional collective first-loss guarantee of up to $3 million through the International Development Association (IDA), a World Bank institution that focuses on development in low-income economies, and through an East African DBE. The objective of this guarantee aims to lower any chances of financial difficulty and that, within the framework of this project, offers an opportunity to strengthen the IFC platform in support of micro, small, and medium enterprises.