A new wind is blowing for Cameroonian Very Small Enterprises (VSEs) and Small and Medium Enterprises (SMEs). It is the Minister of Small and Medium Enterprises, Social Economy and Handicrafts (Minpmeesa), Achille Bassilekin III who has just put on track, the factoring operation within the framework of the BluPass project. It is a lifeline for SMEs and VSEs because “these large companies will help VSEs to ease solvency difficulties”, reassured Achille Bassilekin III. This mechanism framed by the law of April 23, 2014 provides a solution to the need for working capital that characterizes the types of target companies. For its implementation, the government has selected nine companies.
Most of these companies, whose head office is in Douala, operate in the sectors of trade and distribution; manufacturing and marketing; breweries; shipping and maritime transport and metallurgical industry. Namely: Tradex Cameroon; Total Cameroon; Ola Cameroon; Cimencam; CIMAF; Boissons du Cameroun; Union Bank of Cameroon (UBC); CMACGM and Aluminium du Cameroun (Alucam). The latter will indeed identify the service-providing SMEs in their structures with an acceptable profile that can benefit from the factoring operation and draw up a list of these SMEs with invoices awaiting payment and transmit it to the Société Camerounaise d’Equipement (SCE).
To further boost the use of factoring, the government took the initiative to enter into collaboration with a company, BluPass, on December 18, 2023. “From the moment we are able to have financial information that is easy, reliable and understood by VSEs/SMEs, and by financial partners too, that means that we are able to facilitate these entities’ access to financing,” explained François Xavier Tokpanou, CEO of Blupass, while signing a collaboration agreement with Achille Bassilekin III.
Factoring is a means of financing and recovering receivables that allows a company called a “member” to obtain an advance payment from a credit institution, called a “factor”, and to subcontract the management of these receivables by said institution. Thus, “the invoice that is due to the company is no longer paid to the latter, since it has already received an advance payment from the credit institution or “factor”. The invoice is instead paid, later, to the credit institution that purchased it. Such a process is both a means of outsourcing administrative tasks, insurance against non-payment and short-term financing of the Company, thus solving the usual problem of cash flow tension”, explained Minpmeesa. This service, which allows companies to improve their cash flow or working capital requirements and reduce payment deadlines, is remunerated by a management commission on the amount of the invoices.
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Achille BASSILEKIN III, Minister of Small and Medium Enterprises, Social Economy and Crafts (Minpmeesa)
“New oxygen for our VSEs/SMEs, for the growth of our entrepreneurial ecosystem”
In order to further boost the use of factoring, we took the initiative to enter into collaboration with a company called BluPass. On December 18, 2023, in this same room, we signed a collaboration agreement to explore solutions aimed precisely at alleviating the difficulties of access to financing, accounting monitoring, transparency around VSEs which represent, as you know, 79% of our entrepreneurial ecosystem. And so today, with the Cameroonian Equipment Company (SCE), the factoring option has been further increased and we see through the large companies represented here, It was Total, Alucam, Boisson du Cameroun and many other large companies that we encourage through this initiative to join the solutions linked to factoring, to reduce payment deadlines, to ease the difficulties sometimes of settlement, of shortening access times, of solvency of very small businesses and SMEs. And so I am very hopeful that this dynamic that is being initiated today will give new oxygen to our very small businesses, to our SMEs, for the growth of our entrepreneurial ecosystem.
Raïssa WADEM, representative of the Cameroon Equipment Company
“Today we can finance SMEs up to 70% of the net amount to be paid”
So the SCE is a financial institution approved by the MINFI and which specializes in consumer credit and business credit, mainly leasing. So today we are expanding our product offering and in partnership with the Ministry of SMEs for a few months and the technical partner Blupass which we launched SCE Factor. So it is a product that is specialized, which is adapted for SMEs and VSEs, including small and medium-sized enterprises and very small enterprises, and which will allow them to have liquidity, let’s say at any time, to be able to anticipate their cash flow tension and also reduce it. At the SCE level, we are going to communicate on the product. The idea today was to enter into relations with large companies, because it is a product that works in a distributed manner, so the intervention of the large company, the SCE and the SME is required. So, after this step, we will approach the SME by presenting them with the support conditions which are very simple. So, today we can finance SMEs up to 70% of the net amount to be paid of the invoices that they may have with their large companies and therefore over a renewable period of three months. These are the main characteristics of the project.
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