The pilot phase of leasing by which firms can obtain and use fixed assets is on in the country.
Small and Medium-size Enterprises (SMEs) and Industries (SMIs) in the country now have a new financing mechanism in the medium and long terms through which they can acquire equipment or build required premises for the optimum functioning of their businesses. The scheme, code-named "Leasing", a process by which a firm can obtain the use of a certain fixed assets,
was officially launched in Yaounde yesterday November 15 in a ceremony chaired by the Minister of the Economy, Planning and Regional Development, Emmanuel Nganou Djoumessi, and attended among others, by some other Members of Government.
The mechanism, stakeholders say, hinges on State incentives in the form of loans to financial institutions on one hand, and credit lines to be made available by these financial institutions for the support of the modernisation of the productive tools, on the other. For the pilot phase, FCFA 5 billion will be pumped into three banks during this period to facilitate access of entrepreneurs to productive investments and modernising their productive tools so they can ably contribute to sustainable socio-economic development. Stakeholders made it clear that public resources committed within the framework of the leasing, are not subsidies but instead redeemable loans granted to financial institutions. The loan is redeemed within seven years and for the pilot phase, annual reimbursements will be paid to the State treasury and the funds could be ploughed back in the form of new loans.
"The FCFA 5 billion is just for the pilot phase. The government is ready to continue according financial possibilities to those who are interested with the scheme," Emmanuel Nganou Djoumessi said. His colleague of Finance, Alamine Ousmane Mey, disclosed that donor agencies are ready to give a push to the operation but this only when the ongoing pilot phase succeeds. According to the terms of the scheme, the amount of loans given ranges from FCFA 25 to 250 million with an annual interest rate below 10 per cent. The average term of loan is three years with promoters to contribute 15 per cent. Those eligible for the schemes are SMEs and SMIs with share capital in majority owned by nationals and which operate in sectors like timber, agriculture, livestock, mining, industry, tourism, cotton, textile and clothing considered to directly impact growth and employment.
Yesterday's launching coincided with the signing of the operational agreements between representatives of the three financial institutions (SGBC, Alios-Finance and African Leasing Company) and the Ministers of the Economy, Planning and Regional Development and that of Finance. The mechanism shall be extended to all financial institutions operating in the leasing sector should the pilot phase end up satisfactorily. After Yaounde, the operation goes regional next Tuesday November 20 with official launching in all the regional capitals.