"Even at 0%, BEAC rate would have no impact in Cameroon” - Babissakana

Thomas Babissakana has firmly and categorically stated that the recent fall in the interest rate of the Bank of Central Africa States (BEAC) from 3.25% to 2.95% will have no impact on the activities of the commercial banks in Cameroon.

"Manipulation in the interest rates of the BEAC cannot have any substantial impact in terms of access to credit of ordinary Cameroonians. BEAC may even lower its target rate at 0%, this will have no substantial impact in terms of access of financing to ordinary Cameroonians in the absence of minimum monetary infrastructure within their geographical area of activity" says financial engineer in an interview with Cameroon Tribune.

Thomas Babissakana concretely explained that the weak development of the agencies and offices of the monetary public service of BEAC (six locations to Cameroon compared to the 127 offices that France had envisaged in 2012), the limitation of the private service, the limited rate of bankarisation (11%) are all elements that restrict the impact of the measures of BEAC.

As an illustration, the financial engineer said that the interest rate of a commercial bank as Afriland First Bank is currently 13.5% and that of the BICEC is 16.5%. However, he recalls that, "the fixing of interest rate is free. But the depth of the market is still very limited, very low bank account penetration rate, there is no real competition. Consumer associations remain less active and interest rates remain so high, in favour of banks".

BEAC decided, as of July 09, 2014, to bring back its key interest rate from 3.25% to 2.95%. According to explanations from Thomas Babissakana, this rate represents the debtor tender interest rate.

The lowest monetary system, is supposed to guide the determination of all other borrowing rates including those of commercial banks. 'From a perspective of transmission of the actions of the Central Bank to the various economic agents from commercial banks borrowing transactions, money should therefore be slightly less expensive', he noted, in theory.