This financing agreement, within the framework of the Agricultural Sector Development Project in Cameroon, is supported by the African Development Bank (AfDB) and is endowed with the financing of 13.12 million euros from the Commercial Bank of Cameroon, in addition to a partial credit guarantee4.58 million euros for risk sharing with commercial banks.
This fund is endowed with an amount of 13.12 million euros or nearly nine billion FCFA. It will provide long-term resources to microfinance institutions in this Central African country so that they can grant, with some flexibility, medium-term loans of two to four years to actors in agricultural value chains.
“I express my gratitude to the African Development Bank Group, which, like the Cameroonian government, is convinced that agriculture is an important pillar of the structural transformation of our economy. We are very sensitive to this multifaceted support”, declared Cameroon Minister of Agriculture and Rural Development, Gabriel Mbairobe, during the signing ceremony on September 8 in Yaoundé.
“We will ensure that this innovative fund has more resources, so that more farmers benefit from it and, above all, that rural development is a reality in Cameroon and the Central African sub-region”, added the Managing Director of the African Bank of development for Central Africa, Serge N’Guessan.
Endowed with 115.05 million euros, the Agricultural Value Chains Development Project is 77.6% financed by the AFDB, 21.5% by the State of Cameroon, and 0.9% by beneficiaries. Its objectives are to help create shared wealth, and jobs for young people, and strengthen food and nutritional security by strengthening the competitiveness of the oil palm, plantain,n and pineapple sectors, of which Cameroon is one of the main exporters in central Africa.
According to the agreement that has been concluded, the Commercial Bank of Cameroon will make the resources available to microfinance institutions, closer to the field and, therefore, to producer organizations, and small and medium-sized youth enterprises engaged in agriculture.
The microfinance establishment then approaches the financial operator, in this case, the Commercial Bank of Cameroon, for a request for refinancing, which is granted to it at a very concessional interest rate of 3%. In return, the microfinance institution grants loans to its clients, namely cooperatives, and small agricultural enterprises, among others.