Afriland remains the biggest credit contributor to Cameroon as of January 31, 2023 0

The outstanding amount of credit granted by Afriland First Bank to the Cameroonian economy was estimated at CFA1, 037 billion as of January 31, 2023, official banking market data revealed. Compared to the same period the previous year, this bank controlled by Cameroonian billionaire Paul Kammogne Fokam achieved an increase of 12%, thus confirming its position as the largest credit contributor to the economy.

Better still, the financial institution, which claims more than fifty branches across the country, was the first and only one to have exceeded CFA1,000 billion in credit outstanding over the period. It now controls 21.7% of Cameroon’s credit market. The others that make up the top 5 largest credit contributors are Société Générale (CFA721 billion), SCB (CFA476.7 billion), Bicec (CFA460 billion), and CBC (CFA381 billion). Together with Afriland, they control more than 64.5% of the market share.

A look into Afriland’s portfolio over the period under review shows that the bank was more into short- and medium-term loans, which accounted for a big 80.6% of its outstanding amount. This means that it mainly granted consumer loans, equipment loans, and cash flow loans for businesses. Long-term credits, which are used for large investments, only accounted for CFA12.138 billion of its portfolio, although they were up 41% YoY. In this segment, Afriland came far behind CBC (CFA47.8 billion) and Standard Chartered Bank (CFA31.693 billion). Moreover, more than three-quarters of its loan portfolio over the period went to private companies and individuals. Loans to these two categories of clients grew by 13% YoY to CFA632.2 billion and 34.3% YoY to CFA254.5 billion respectively.

However, the dark side of granting so much credit to the economy is the exposure to the risk of not getting the money back. The number of bad debts in Afriland’s portfolio was estimated at CFA133.8 billion over the period, compared with CFA121.9 billion 12 months earlier. To cover these receivables, the institution had to use its equity to make provisions of CFA99.8 billion.

Source: Business in Cameroon