African Development Bank Deploys €25 Million Trade Finance Guarantee to Transform Cameroon’s SME Landscape Through Strategic CCA-Bank Partnership

The African Development Bank Group has approved a landmark €25 million trade finance facility to strengthen Crédit Communautaire d’Afrique-Bank’s capacity to support small and medium-sized enterprises across Cameroon, marking a pivotal moment in the country’s economic development trajectory. The facility was approved on December 1 during a Board of Directors session in Abidjan, Ivory Coast, positioning CCA-Bank as a critical conduit for channeling development finance to businesses that form the backbone of Cameroon’s economy.

This strategic intervention deploys the African Development Bank’s Transaction Guarantee instrument, a specialized financial product designed to provide risk coverage for eligible African banks engaged in trade finance transactions. The guarantee mechanism enables CCA-Bank to confidently extend trade finance services to SMEs by mitigating the non-payment risks that typically constrain African commercial banks’ lending capacity.

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The Transaction Guarantee: A Game-Changing Financial Instrument

The Transaction Guarantee was launched in 2021 as part of the African Development Bank’s comprehensive strategy to address Africa’s persistent trade finance gap. This innovative instrument provides up to 100% non-payment risk cover to confirming banks for trade finance transactions initiated by eligible African issuing banks, effectively leveraging the Bank’s AAA credit rating to facilitate commerce across the continent.

The instrument covers a diverse array of trade finance tools, including confirmed letters of credit, commercial loans, irrevocable repayment undertakings, endorsed drafts, and promissory notes. This comprehensive coverage allows African banks to support their clients’ import and export activities with greater confidence, particularly in challenging markets where correspondent banking relationships have deteriorated.

According to Lamin Drammeh, Head of the Bank Group’s Trade Finance Division, the facility enables the African Development Bank to provide up to 100% guarantee to confirming banks, streamlining the confirmation of letters of credit and similar trade finance instruments issued by CCA-Bank for the benefit of Cameroon’s SMEs. This level of comprehensive risk coverage represents a significant departure from traditional partial guarantee schemes and demonstrates the Bank’s commitment to catalyzing trade flows across Africa.

Strategic Focus on Critical Economic Sectors

The transaction guarantee will specifically support imports of equipment for industrial, agro-industrial, and telecommunications sectors, aligning with Cameroon’s industrialization ambitions. These sectors represent critical pillars of the country’s economic transformation strategy, and access to modern equipment remains a persistent bottleneck constraining their expansion and productivity enhancement.

Manufacturing enterprises require specialized machinery, processing equipment, and technology upgrades to compete effectively in regional and international markets. The agro-industrial sector, which processes Cameroon’s abundant agricultural outputs including cocoa, coffee, palm oil, and timber, depends on sophisticated processing equipment to add value and meet international quality standards. Meanwhile, the telecommunications sector continues to expand rapidly, requiring ongoing infrastructure investments to extend connectivity across Cameroon’s diverse geography.

Léandre Bassolé, Director General of the Bank’s Central Africa region, emphasized that the operation aligns with the institution’s ambition to increase direct interventions favoring Cameroon’s private sector. He underscored that strengthening CCA-Bank’s capacity to support SMEs, including those owned by women and young entrepreneurs, will boost the local productive sector, facilitate economic growth, and create and maintain thousands of jobs across the country.

CCA-Bank’s Evolution and Strategic Positioning

Crédit Communautaire d’Afrique-Bank brings unique credentials to this partnership, having undergone a remarkable institutional transformation over the past two decades. Founded in 1997 in Bafoussam, Western Cameroon, the institution began operations as a savings and credit cooperative before obtaining regulatory approval in 2006 to become a category-2 microfinance institution licensed by the Central African Banking Commission.

The institution’s most significant transformation occurred in 2018, when CCA-Bank received its full banking license, transitioning from Cameroon’s largest microfinance institution to an inclusive universal bank. This regulatory elevation expanded CCA-Bank’s operational scope, enabling it to offer a comprehensive range of deposit and loan products to individuals, SMEs, and large corporations across all ten regions of Cameroon.

CCA-Bank’s network infrastructure positions it strategically to serve businesses throughout Cameroon’s diverse economic landscape. With a presence spanning all administrative regions and operating the third-largest branch network in the country, the bank maintains deep relationships with local businesses and understands the specific challenges facing enterprises in different geographic and sectoral contexts.

The bank’s commitment to financial inclusion manifests through specialized programs including its Women Banking Program, which targets female entrepreneurs who face particularly severe credit constraints in accessing formal financial services. Additionally, CCA-Bank recently received authorization from the Banking Commission to partially operate Islamic finance within its network, expanding its service offerings to accommodate clients seeking Sharia-compliant financial products.

The Critical Role of SMEs in Cameroon’s Economy

Small and medium-sized enterprises constitute the fundamental architecture of Cameroon’s economic structure. According to the Ministry of Small and Medium-Sized Enterprises’ 2024 Statistical Yearbook, Cameroon currently hosts 443,524 SMEs out of a total of 444,302 active enterprises, representing 99.8% of the country’s business landscape.

The SME sector generated an impressive 137,847 jobs in 2023, with SMEs accounting for 91.81% of total employment creation. Research indicates that SMEs contribute approximately 50% to Cameroon’s GDP while providing roughly 60% of total formal employment, underscoring their indispensable role in the national economy.

The structural composition of Cameroon’s SME ecosystem reveals interesting patterns. Very Small Enterprises employing five or fewer people constitute 87.1% of all SMEs, yet these fragile actors account for 64.89% of job creation while contributing only 1.9% to value addition. This concentration highlights both the job creation potential and the productivity challenges facing Cameroon’s entrepreneurial landscape.

Sectorally, the SME distribution reflects Cameroon’s economic structure, with 84.2% operating in the tertiary sector, 15.63% in the secondary sector, and a mere 0.17% in the primary sector. This heavy concentration in services and commerce suggests significant opportunities for industrial deepening and agricultural value addition.

Persistent Financing Constraints Facing Cameroonian SMEs

Despite their economic significance, Cameroonian SMEs confront severe financing obstacles that constrain their growth and operational capacity. Research from the World Bank indicates that 70% of SMEs in Cameroon are excluded from formal financial services, primarily due to stringent lending conditions and inadequate collateral.

Commercial banks typically require collateral exceeding 120% of loan values, with interest rates ranging between 11-14% for short-term facilities. These demanding conditions place formal banking services beyond the reach of most small enterprises, forcing them to rely on microfinance institutions charging effective annual percentage rates of 24-30% or informal lenders with even more onerous terms.

Access to trade finance presents particular challenges. International confirming banks have progressively withdrawn from African markets due to heightened regulatory requirements, stringent Know Your Customer compliance demands, and perceived country and counterparty risks. This correspondent banking retreat has created acute shortages of trade finance capacity precisely when African businesses seek to expand their international commercial activities.

The African Development Bank’s intervention through CCA-Bank directly addresses these constraints by providing the risk mitigation that enables international banks to maintain trade finance relationships with African institutions. By guaranteeing up to 100% of non-payment risk, the facility removes the primary obstacle preventing confirming banks from supporting letters of credit and similar instruments issued by CCA-Bank.

CCA-Bank’s Track Record in Development Finance Partnerships

The African Development Bank facility builds upon CCA-Bank’s established record of successful partnerships with international development finance institutions. In June 2023, the International Finance Corporation announced a partnership providing CCA-Bank with a loan equivalent to $16.6 million in Central African CFA Francs specifically to scale up lending to micro, small, and medium-sized enterprises, with at least 25% earmarked for women-owned businesses.

More recently, in April 2025, the Islamic Corporation for the Development of the Private Sector disbursed €15 million to CCA-Bank to strengthen local SMEs through productive investments in agribusiness, transportation, and healthcare sectors. This facility simultaneously bolstered CCA-Bank’s rapidly expanding Islamic finance window, demonstrating the institution’s capacity to manage diverse funding relationships and deploy resources effectively.

These successive partnerships validate CCA-Bank’s institutional capacity, risk management frameworks, and commitment to serving underserved market segments. The African Development Bank’s due diligence process rigorously evaluates potential partner institutions, and CCA-Bank’s qualification for the Transaction Guarantee confirms its operational and governance standards meet the Bank’s stringent requirements.

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Leadership and Strategic Vision

Marguerite Fonkwen Atanga, Managing Director of CCA-Bank, brings distinctive leadership to the institution during this transformative period. Appointed in April 2023, she represents one of the few female bank CEOs in the Economic and Monetary Community of Central Africa region, positioning CCA-Bank as an example of women in leadership within the regional financial sector.

In welcoming the African Development Bank partnership, Atanga expressed gratitude for this debut direct financing support, characterizing it as a major milestone that will significantly strengthen the bank’s capacity to support small and medium-sized enterprises, women entrepreneurs, and startups not only in Cameroon but across Africa. Her emphasis on continental reach reflects CCA-Bank’s ambitions to leverage this partnership for broader regional impact.

The Broader Context: AfDB’s Trade Finance Strategy

The CCA-Bank facility represents one element of the African Development Bank’s comprehensive trade finance program, which addresses the continent’s persistent $120 billion trade finance gap. Africa accounts for only 3% of global trade and maintains lower intra-regional trade proportions than any other world region, remaining overly dependent on raw material exports with growth fluctuating according to international commodity prices.

The Transaction Guarantee instrument specifically targets this challenge by enabling African banks operating in regional member countries, particularly in low-income countries and transition states, to access the risk coverage necessary for expanding trade finance operations. The instrument’s flexibility and comprehensive coverage have proven attractive to African banks seeking to expand their service offerings without accumulating excessive balance sheet risk.

Since its launch in July 2021, the Transaction Guarantee has been deployed across multiple African countries. The African Development Bank has approved similar facilities for institutions including NBS Bank in Malawi, Bank of Africa Tanzania Limited, Ecobank Centrafrique, and Bank of Africa Benin, demonstrating its scalability and adaptability across diverse country contexts.

Expected Economic Impact and Job Creation

The €25 million facility’s economic impact extends far beyond its nominal value through multiple transmission mechanisms. By enabling CCA-Bank to issue trade finance instruments with reduced risk exposure, the facility effectively multiplies its impact as each guaranteed transaction supports real economic activity including equipment procurement, raw material imports, and commercial exchange.

The facility’s focus on supporting SMEs amplifies its employment effects. As noted in the African Development Bank’s analysis, strengthening CCA-Bank’s capacity to support SME activities, particularly those owned by women and young people, will boost the local productive sector while creating and maintaining thousands of jobs across diverse economic sectors.

Equipment imports facilitated by the guarantee will enhance productivity across recipient enterprises. Manufacturing firms acquiring modern machinery can increase output, improve quality, and reduce unit costs, strengthening their competitive positioning in both domestic and export markets. Agro-processing enterprises obtaining advanced equipment can add greater value to primary commodities, capturing higher margins and creating additional employment in processing activities.

The telecommunications sector’s equipment needs support network expansion and service enhancement, extending connectivity to underserved populations and enabling digital economic participation. As Cameroon advances its digital transformation agenda, telecommunications infrastructure investments generate positive externalities across the entire economy by facilitating e-commerce, digital financial services, and remote work capabilities.

Challenges and Considerations for Sustainable Impact

While the African Development Bank facility addresses critical financing constraints, Cameroon’s SME sector confronts multiple additional challenges that require coordinated policy interventions. The business regulatory environment imposes significant compliance burdens, with only 10 commercial registries serving all 10 regions and many SMEs filing annual returns late, incurring penalties of XAF 50,000.

Infrastructure deficiencies constrain productivity and increase costs. Electricity supply remains unreliable in many areas, forcing businesses to invest in expensive backup generation capacity. Transportation infrastructure limitations impede market access and increase logistics costs, particularly for enterprises located outside major urban centers.

Informal sector prevalence creates unfair competitive dynamics, with 68% of micro-firms remaining undeclared to social security authorities, avoiding statutory contributions while denying workers formal employment protections. This informality undermines the business environment for compliant enterprises while limiting workers’ access to social protection schemes.

The SME ecosystem also suffers from limited access to business development services including technical assistance, management training, and market linkage support. Many entrepreneurs lack formal business education and struggle with financial management, strategic planning, and regulatory compliance. Addressing these capacity gaps requires coordinated interventions beyond financing provision alone.

Integration with National Development Priorities

The African Development Bank-CCA Bank partnership aligns closely with Cameroon’s National Development Strategy 2020-2030, which positions SMEs at the heart of the country’s employment creation and economic transformation agenda. The strategy emphasizes industrial development, import substitution, and export promotion, all of which depend fundamentally on SME dynamism and competitiveness.

Recent government initiatives complement the trade finance facility’s objectives. The Integrated Plan for Import-Substitution of Agri-food and Fisheries Products (PIISAH 2024-2026) aims to boost local production and processing, increasing Manufacturing Value Added to 25%. Success in these initiatives depends on enterprises’ ability to acquire necessary equipment and technology, precisely the constraint that the AfDB facility addresses.

The Cameroonian government’s roadmap developed with the Groupement des Entreprises du Cameroun for 2024-2026 focuses on energizing the SME ecosystem and strengthening enterprises’ capacities to amplify their impact on economic transformation. The AfDB facility provides critical financial infrastructure supporting these broader ecosystem development efforts.

Regional and Continental Implications

Beyond its direct impact in Cameroon, the CCA-Bank transaction guarantee contributes to broader regional integration objectives. The Economic and Monetary Community of Central Africa seeks to deepen intra-regional trade, and enhanced trade finance capacity in member countries facilitates cross-border commercial relationships and supply chain development.

The African Continental Free Trade Area (AfCFTA), which commenced operations in January 2021, aspires to create a single market for goods and services across Africa. Realizing this vision requires robust trade finance infrastructure enabling enterprises to confidently engage in cross-border transactions. The AfDB’s Transaction Guarantee instrument directly supports AfCFTA implementation by reducing trade finance constraints that currently impede intra-African commerce.

As African countries progressively implement AfCFTA protocols and reduce tariff barriers, trade finance capacity will become an increasingly critical determinant of enterprises’ ability to exploit expanded market access opportunities. The CCA-Bank facility demonstrates how development finance institutions can systematically build the financial infrastructure necessary for African economic integration.

The Path Forward: Monitoring and Evaluation

Ensuring the facility achieves its intended development outcomes requires robust monitoring and evaluation frameworks tracking both financial performance and developmental impact indicators. Key metrics should include the volume and value of trade finance transactions facilitated, the number and characteristics of beneficiary SMEs, sectoral distribution of supported enterprises, and employment effects.

Gender-disaggregated data remains particularly important given CCA-Bank’s commitment to supporting women-led businesses. Tracking the proportion of facility benefits flowing to female entrepreneurs will indicate whether the intervention successfully addresses the particularly severe credit constraints facing women business owners.

Geographic distribution analysis will reveal whether benefits reach enterprises across Cameroon’s diverse regions or concentrate in the major economic centers of Douala and Yaoundé. Given CCA-Bank’s presence across all ten regions, the facility provides opportunities for supporting economic activity in traditionally underserved areas, but intentional targeting and monitoring will be necessary to realize this potential.

Conclusion: A Model for Development Finance Innovation

The African Development Bank’s €25 million trade finance guarantee to CCA-Bank represents more than a financial transaction; it exemplifies how development finance institutions can strategically deploy their comparative advantages to catalyze private sector development. By leveraging its AAA credit rating to provide comprehensive risk coverage, the AfDB enables African commercial banks to expand their service offerings and support enterprises that might otherwise lack access to trade finance.

The partnership’s success will ultimately be measured not in financial metrics alone but in its contribution to Cameroon’s economic transformation. As SMEs acquire critical equipment, enhance productivity, and expand their operations, they will create employment opportunities, generate tax revenues, and contribute to poverty reduction objectives. The facility’s focus on industrial, agro-industrial, and telecommunications sectors positions it to support structural transformation away from commodity dependence toward higher value-added economic activities.

For CCA-Bank, the facility validates its institutional development journey from microfinance cooperative to universal bank capable of partnering with premier development finance institutions. The partnership enhances the bank’s capabilities while demonstrating its commitment to its founding mission of promoting financial inclusion and supporting underserved market segments.

As Africa navigates the challenges of economic development, job creation, and poverty reduction, innovative financing mechanisms like the Transaction Guarantee will play increasingly important roles. The CCA-Bank facility provides a replicable model for how development finance institutions and African commercial banks can collaborate to address persistent financing gaps while supporting the entrepreneurs and enterprises that will drive the continent’s economic future.

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By: Montel Kamau

Serrari Financial Analyst

3rd December, 2025