IFC to Boost Cameroonian SMEs with $60 Million Loan to Afriland First Bank
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Loading... - Tania Gbeho
- 23 Dec 2024
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On December 27, the board of the International Finance Corporation (IFC), a branch of the World Bank focused on financing the private sector in emerging markets, will discuss a significant loan to Afriland First Bank, one of Cameroon’s leading financial institutions, headed by billionaire Paul Kammogne Fokam. The proposed loan, which could reach up to $60 million (approximately CFA 37.5 billion), aims to support the development of small and medium-sized enterprises (SMEs) in Cameroon, which constitute over 99% of the country's economy.
The project involves a senior, unsecured loan with a maximum duration of five years and a grace period of up to 12 months. The IFC plans to finance $20 million of the loan, while the remaining $40 million will be sourced from other partner lenders. This funding will enhance Afriland First Bank's capacity to provide long-term credit to Cameroonian SMEs. Notably, at least 25% of the funds will be earmarked for businesses led by female entrepreneurs, a sector that remains underdeveloped in Cameroon’s economy. This initiative aligns with the IFC’s commitment to promoting women’s empowerment and expanding economic opportunities for women.
Despite some advancements, female entrepreneurs in Cameroon continue to face significant barriers in accessing financing. According to World Bank studies and government data, women lead only 23% of manufacturing SMEs, despite representing 51% of the population, and manage 38% of businesses in the country. In addition to the loan, the project may also benefit from a collective first-loss guarantee of up to $3 million, provided by the International Development Association (IDA), the World Bank institution dedicated to low-income countries. This guarantee is intended to mitigate financial risks and strengthen the project, further supporting the IFC’s platform for micro, small, and medium enterprises.
