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Increase in Interest rates observed in Cameroon

Between the 1st and 2nd quarter of 2023, the interest rate granted to individuals increased in Cameroon as highlighted in the report on lending rates practiced by Cemac countries.

According to the said report, the rates rose from 13.33% to 16.62% between the two periods, an increase of 329 basis points (3.2%), which demonstrates that Cameroonian individuals are more coping with the increase in rates. bank interest rates than companies. Indeed, and at a time when rates for individuals are experiencing a fairly significant increase of 3.2% between the first and 2nd quarters of 2023, those applied to Small and Medium Enterprises are increasing by only 1.43%, ranging from 9.95 % to 11.38%.

While this increase seems to apply to other entities, notably large companies; financial analysts justify the increase in bank interest rates in Cameroon by the implementation of a restrictive monetary policy by the central bank of the Cemac sub-region. In order to counter galloping inflation in this community area, the monetary policy put in place by the central bank was based on a drying up of the banks. A banking drying up which materialized through the increase in key rates, the suspension of liquidity injection operations and the intensification of liquidity drain operations in the banks; Consequently, the reduction in the liquidity supply led to the rise in interest rates.

Regarding large companies, the interest rates granted to them increased by 99 basis points, or 0.99%. Moreover, reading the report from the Bank of Central African States, we observe that “The average lending rates served to large companies fell slightly to stand at 7.05% in the second quarter of 2023, compared to 7.21% a year earlier. On the other hand, they increased by 99 basis points between the first and second quarters of 2023.”