Diversifying Funding Mechanisms For SMEs!

Cameroonians in general and actors in the small and medium-sized enterprise sector in particular are anxiously waiting to see what the announced restructuring of the Bank for Small and Medium-sized Enterprises would give when the operation is finally brought to an end. Their high expectations are certainly borne from the euphoria that animated the Head of State’s announcement of the bank during the Ebolowa Agropastoral Show in 2011 and its eventual creation thereafter. More so as it was supposed to bail SMEs stakeholders out of incessant funding challenges to prosperity but which unfortunately fell short of the huge anticipations from across the board. In effect, announced in 2011 and effectively went operational in 2015, the State-owned Bank for Small and Medium-sized Enterprises was expected to offer business- friendly credit lines, other finances and facilities to registered SMEs across the country. The overall goal was to give a strong stimulus to the sector, seen as one of the pillars on which the national economy sits. It recruits almost everyone, both those with formal and informal education, and cuts across all activities of national life. Statistics even show that SMEs make up for over 90 per cent of Cameroon’s economic fabric, with majority very small and small enterprises. People striving for survival; struggling to live and let others live. Giving promoters of this sector the opportunity to grow their businesses would therefore have a multiplier effect in developing the economy in terms of job creation and wealth generation. How well the hitherto hope-raising funding structure lived up to its billing remains far-fetched. But for one thing, the challenges that plagued its management over the years, pushing the sub-regional banking gendarme, COBAC, to suspend its General Manager some years back, and the announced restructuring now, lend credence to functional malaise which could only compromise performance. Lifting its business capital from FCFA 10 to 20 billion did not even change matters as the bank deteriorated in structure and output. Accusing fingers were pointed at insolvent clients who took money but never refunded when it was due. Inasmuch as the borrowers blamed those with whom they did business for untimely or even non-payment, the bottom line is that the bank has nearly had a still-birth over the years, shattering the dreams of millions who saw in the bank salvation for their businesses. Regrettable indeed! What is now clear is that when it will be finally restructured, funding SMEs will only be one of its missions. Going by reports of a tender launched by the National Economic and Financial Committee, the aim is to transform the bank for SMEs into a development finance institution, call it second-tier bank or bank for banks. Reports say the tender seeks a firm to conduct financial due diligence and develop a business plan to transform the Bank for Small and Medium-sized Enterprises. Clearly, an audit to be carried out will determine the bank’s true financial position as well as make an estimate of its recapitalisation needs. Specification is made of the fact that the firm will also develop a business plan for the next five years, in line with the idea of repositioning it as a second-tier bank for financing SMEs at affordable costs. Even though details show that provision will be made within the new structure for the financing of small and medium-sized enterprises, the whole setup easily sounds like derailing from the original mission. Will a branch bear better fruits than when it was a tree? Have they learned over the years and are ready to right the wrongs for things to fully get on track? Or just another ploy to play for time and make selfish gains while the sector yearns for adaptable funding? This may just be some of the worries the observant public cannot help but ask. Whatever comes out of the restructuring of the bank, especially in favour of the country’s SMEs, may not however be known upfront but one thing stands out clear – The secto...