Commitment by local banks to financing the economy has increased. The information is contained in the communiqué of the extraordinary session of the Council of Credit, NCC, on September 14, 2015, chaired by its President, Alamine Ousmane Mey, who doubles as Finance Minister.

It revealed that efforts to finance the economy by local banks paid off between May 31, 2014 and May 31, 2015. According to the release, bank loans increased with total balance sheet showing 9.5 per cent in transactions, with an increase in savings of 8.1 per cent.

Loans issued out rose by 12.9 per cent. This shows the ease with which government can get money from local banks to finance development projects instead of depending on foreign donors for sometimes lengthy and development-unfriendly loans.

The report comes on the heels of that of the National Financial and Monetary Committee which indicated that internal loans increased by 15.1 per cent between March 2014 and 2015. In effect, the amount of internal debts rose from FCFA 2,017.1 billion in March 2014 to FCFA 2,322.1 billion during the same period.

A source at the national head office of the Bank of Central African States who preffered not to be named, explained that increase in loans given out to clients could be attributed to the increase in savings noticed by local banks.

“Increased savings is tantamount to liquidity in banks which has pushed the rate of loan issuance to 12.9 per cent,” said the source. He explained that government finances the economy through the issuance of bonds and the development of Small and Medium-size Entreprises.

Earlier this year, members of the Monetary Policy Committee of the Bank of Central African States, agreed on the need to slash interest rates on local banks to 2.45 per cent, down from 2.95 per cent, after assessing the balance sheet of the global and sub-regional macroeconomic progress and prospects.

Cognisant of the fact that economies of the six States of the Economic and Monetary Community of Central African States, CEMAC, do not speak well in terms of growth, the Central Bank opted for less expensive loans in order to inspire local investors, given that the higher the interest rates, the fewer the loans.

Our source stressed that “the performance of the local banks augurs well for the local economy given the international economic environment characterized by crises, especially those in the Eurozone.” He explained that it tells of Cameroon’s ability to face global economic hazards and pursue her emergence drive without much difficulty.”