Microfinance institution, ACEP Cameroon, to mobilise 5 billion FCFA in bonds.

Panelists at launching ceremony in Douala

The Board of Directors of the Private Enterprise Credit Agency, known by its French acronym, ACEP Cameroon, a category two microfinance institution and member of the ACEP International network, has approved the issuance of a bond by public call savings called “ACEP Cameroon 7% Gross 2024 – 2027” in the Central African Financial Market. 



The financial resources, mobilised through the bond issue, is expected to amount to 5 billion FCFA by the time of maturation.  The sum, going by information disclosed at the launch in Douala on Thursday January 9, will serve to support the growth of the institution. 

It will also enable ACEP Cameroon to meet the financing needs inherent in the objectives of its 2022-2024 strategic plan, while reducing its financial dependence on international private donors.

It will also be intended to finance very small business players in cross-border trade and artisanal processing, identified with the support of the Ministry of Trade. 

The ACEP 2024 strategic plan provided for an increase in credit production of about 23% over the reference period of 2022-2024. 

The achievements observed are in line with the forecasts of the strategic plan, or even ahead of schedule since credit production increased by 15% between 2022 and 2023, instead of the expected 11%. 

In order to support the increase in production, ACEP Cameroon has decided to diversify its sources of financing by favouring, as much as possible, sources of financing in local currency, recognizsed as being less expensive. 

Amongst the sources of financing in local currency is the bond issue, which will fill the financing gap left vacant by traditional sources of financing. 

According to ACEP Cameroon General Manager, Yann Akindele, they are looking for more structured mechanism that will be beneficial to all stakeholders. 

It should be noted that ACEP is one of the first of microfinance institution to venture into this type of financing. The management of the institution hopes the results will serve as green light to other institutions to revolutionise the sector.

Economists opine that Cameroon suffers from a timid entrepreneurship landscape and a private sector made up of Small and Medium Sized Enterprises, SMEs, which are not very viable, due to lack of financing. 

This situation, they said, tends to be accentuated with socio-economic crises hitting the world, and more specifically the Central Africa sub-region. 

According to the latest Statistical Yearbook on SMEs, published by the sectoral ministry, Cameroon currently has 393,166 SMEs, of which 19,651 were created in 2023. 

This figure is up compared to the 15,591 SMEs created in 2021 and 15,601 in 2022, indicating continued growth in the sector. 

Likewise, social economy organizsations and artisanal production units, respectively recorded the creation of 3,865 and 3,557 entities over the same period.

In terms of sectoral distribution, 0.1% of SMEs are in the primary sector, 20.3% in the secondary sector and 79.6% in the tertiary sector. All together, these structures generated nearly 137,847 jobs in 2023, of which 91.81% came from SMEs.

Talking on the importance of the sector to economic growth, Nlep Nlep II Arnold Samy Richy, Chargé d'Affaires of the capital market, said the affordability of the investments schemes is to encourage all to invest in a trusted institutions within the sub region to make profit. 

"Each bond issued, with a face value of 10,000 FCFA, is redeemable at a constant half-yearly amount of 2,000 FCFA, or a fifth of its nominal value. This redemption begins after a capital deferral period of six months. The loan will be fully redeemed in December 2027," he said.

Cross-section of attendees at bond issue launch in Douala

 

 

Minimum subscription rate 

The minimum subscription is set at 10 bonds, corresponding to an investment of 100,000 FCFA. In the event that the total amount of subscriptions collected by the placement syndicate at the end of the subscription period does not allow the target amount of the loan to be reached, the Issuer, ACEP Cameroon, reserves the right to maintain the issue up to the amounts actually collected or to extend the subscription period after prior agreement from COSUMAF. 

In the event that the total amount of subscriptions collected exceeds FCFA 5 billion FCFA, ACEP Cameroon reserves the right to over-allot after prior agreement from the Central African Financial Market Authority, COSUMAF, or to reduce the quantities subscribed by prioritising subscriptions from individuals and non-banking legal entities. On the portion of the remaining securities, subscriptions from banking legal entities would be reduced in proportion to the amounts initially requested.

 

This story was first published in The Guardian Post Edition No:3337 of Monday January 13, 2025

 

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