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1. Who Lends to Africa and How? Introducing the Africa Debt Database

Author:
David Mihalyi and Christoph Trebesch
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Africa’s sovereign debt markets are not well understood, partly due to a lack of data. This paper introduces the Africa Debt Database (ADD), the most granular and comprehensive dataset on external borrowing by African governments thus far. Our project moves beyond existing aggregate datasets and instead releases information on individual loans and bonds, in particular on the financial terms of each instrument. Taken together, we cover nearly 7000 loans and bonds between 2000 and 2020, with a total volume of 644 billion USD. Using this data, we study Africa’s record lending boom of the 2010s in detail. The debt boom was mainly driven by large sovereign bond issuances in London and New York, as well as growing lending by Chinese state-owned banks. The micro data also reveal a large variation in lending terms across countries, time, and creditors. Sovereign external bonds have interest rates of 6 percent, on average, Chinese banks charge 2-4 percent, and multilateral organizations just 1 percent. Strikingly, many governments in Africa simultaneously borrow large amounts from both private and official creditors, at vastly different rates. The large differences in debt servicing costs are indicative of a cross-creditor subsidy, as cheap concessional loans can be used to pay the high interest to private or Chinese creditors.
Topic:
Economics, Foreign Aid, Credit, and Influence
Political Geography:
Africa, China, and Asia

2. Information Asymmetry: A Major Obstacle to Credit Provision In Cameroon

Author:
Jean-Cedric Kouam and Maurice Tchegho
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
According to the report published by the World Bank, which ranks the world’s economies Doing Business (2020) according to the ease of doing business, Cameroon ranked 167th out of 190 economies, a loss of one place compared to 2019. However, the country gained 0.1 point by recording a score of 46.1 points out of the 100 at stake. According to the World Bank, this slight increase is the result of the improvement of one of the ten indicators taken into account in the calculation of the score, that relating to access to credit. Indeed, with the help of the Economic and Monetary Community of Central Africa (CEMAC), Cameroon has established a framework for the granting of licenses and the operation of credit bureaus (1) which has enabled it to rank 80th in terms of obtaining credit, with a score of 60 out of 100 for obtaining credit and 6 for the depth of information on credit. Conversely, the score for credit bureaus is zero (World Bank, 2020). Despite this notable progress, particularly with regard to access to credit information, information asymmetry remains a serious problem in the relationship between the credit applicant and the credit provider in Cameroon. Defined as the lack of communication of accurate and reliable information from companies, this translates into the fact that one of the contracting parties holds information that it decides, voluntarily or not, to transmit to the other party. This constitutes an obstacle to project financing. From this situation, a major concern arises: What are the causes and consequences of informational opacity in the credit granting process in Cameroon?
Topic:
Communications, Finance, Business, and Credit
Political Geography:
Africa and Cameroon

3. A Look at the Legal Framework and Constraints of Credit Granting In Cameroon

Author:
Steve Tametong and Martial Nteme
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The realisation of an investment depends, in certain cases, on the use of credit. The granting of credit requires a prior credit operation. According to section 3 of Law No. 2019/021 of 24 December 2019 to lay down certain rules relating to credit activity in the banking and microfinance sectors in Cameroon, a credit operation means “the act by which a reporting institution, acting for consideration, advances or promises to advance funds to a natural or legal person, or makes a commitment by signature in the interest of the latter”. In reality, the credit applicant is faced with challenges that stem partly from his or her ignorance of the legal framework for granting credit in Cameroon. It is therefore necessary for each credit applicant to master the legal environment that governs the granting of credit. This is the first articulation of this analysis (I). The second section examines the conditions and constraints of credit granting (II). The third section sets out recommendations for improving the framework for granting credit in Cameroon (III).
Topic:
Infrastructure, Finance, Investment, and Credit
Political Geography:
Africa and Cameroon

4. Diaspora Investors and Access to Bank Credit in Cameroon: Constraints and Opportunities

Author:
Ballo Ngomna and Joel Moudio
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
According to the Doing Business 2020 report, “compared to the previous year, sub-Saharan African economies improved their average score by 0.9 points” on the Doing Business index, which ranks countries on the ease of doing business. Overall, Cameroon’s index value (46.1) does not give it an honourable ranking (167th out of 190). However, its ranking is better in terms of obtaining loans (80th out of 190), one of the ten components used to calculate the index.
Topic:
Economics, Finance, Credit, and Banking
Political Geography:
Africa and Cameroon

5. Examining the Difficulties Encountered by Women in Obtaining Credit in Cameroon

Author:
Jean-Cedric Kouam, Ulrich D'Pola, and Shandy Mopia
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
In Cameroon, women represent 50% of the total population (World Bank, 2020). Vulnerable jobs among women – i.e., those of unpaid family workers and those of self-employed persons – represent 80.82% of total jobs among women, compared to 62.89% among men (World Bank, 2019). One of the reasons for the high vulnerability of women’s employment is the difficulty of accessing finance (credit), which is limited to micro-finance. Indeed, more than 90% of women do not have an account with a formal banking institution and therefore cannot benefit from the credit, and only 16.8% of women have access to credit for any use. However, access to credit and other financial services for women is a prerequisite for the economic empowerment of women and promulgation of gender equality. It is a pathway to fight against the economic marginalization of women and promote economic inclusion. The role of women in economic development cannot be underestimated, even though most women are involved in the informal sector. Major challenges, such as access to credit, limit the ability of women to grow from the informal to the formal sector or exploit the same economic opportunities as men. This challenge is pertinent and is faced by several countries in sub-Saharan Africa, where most women are involved in informal activities such as agriculture. While the general conditions necessary for access to credit in Cameroon do not discriminate gender-wise, women still face several impediments that make access to credit difficult for them as compared to men. This article looks at the difficulties encountered by women in obtaining credit and makes key recommendations to respond to these challenges to make credit easily accessible for women.
Topic:
Gender Issues, Finance, Credit, Banking, and Equality
Political Geography:
Africa and Cameroon

6. Economic Impact Analysis of Credit Guarantee Schemes in Eswatini: A Case of the Small Scale Enterprise Loan Guarantee Scheme (SSELGS)

Author:
Maqhawe Zwane
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Eswatini Economic Policy Analysis and Research Centre (ESEPARC)
Abstract:
Using data from 315 beneficiaries of the Small Scale Enterprise Loan Guarantee Scheme, this study assesses the impact of the Small Scale Loan Guarantee Scheme. The study assessed both the financial and economic additionality of the scheme. The study used a structured questionnaire and face-to-face interviews to elicit data from beneficiaries whereas key informant interviews were used to elicit data from participating banks. The study also assessed visibility of the scheme as well as its efficiency in terms of loan approval period and claim processes. From the sampled beneficiaries, 174 SMEs would not have accessed credit if the scheme was non-existent. Collectively, these SMEs received E42, 918,616.00. On the other hand, 72 of the 174 started new businesses and at the time of the interview, they collectively employ 681 people. The study found that the default rate is high at 44.3 %. The approval period of loan application varies widely, with some respondents reporting a period of less than a month while others reported a period of up to four years. The study concludes that the scheme has made a positive impact in both financial and economic additionality. However, two factors (inefficiency in scheme’s operation and high default rate) threaten the scheme’s existence. It is therefore a recommended that scheme managers should put measures to curb the default rate and improve the efficiency and visibility of the scheme.
Topic:
Economics, Business, Credit, and Loans
Political Geography:
Africa and Eswatini

7. Financing SMEs In Botswana: Factors Influencing Access to Credit

Author:
Goitseone Khanie
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This study examines factors influencing access to credit by SMEs in Botswana. Using the 2010 World Bank Enterprise Survey, and employing logit model for analysis, we find that access to credit is influenced by gender, citizenship and experience of the entrepreneur; as well as firm-size, sector of business,sales and land ownership. Therefore, public policy must pay attention to the diversities of SMEs’ socio-economic characteristics as well as the business environment in which they operate when implementing finance assistance progammes. Measures to develop SMEs must be carefully focused, aiming at providing incentives for financial institutions to play an active role in SME financing. Government must formulate policies that will make finance institutions relax their requirements and lending procedures which tend to discourage borrowing. Similarly, public policy must be focused on strengthening the business acumen of SMEs through trainings and workshops, such that they are perceived attractive to financiers.
Topic:
Finance, Entrepreneurship, Business, Public Policy, and Credit
Political Geography:
Africa and Botswana

8. Full Issue

Author:
Sefi Atta, Kathleen Stassen Berger, Jacqueline Copeland Carson, Kinuthia Macharia, and Femi Ojo-Ade
Publication Date:
01-2011
Content Type:
Journal Article
Journal:
Ìrìnkèrindò: A Journal of African Migration
Institution:
Ìrìnkèrindò: a Journal of African Migration
Abstract:
CONTENTS Articles Independence Day — Sefi Atta....................................................................................................... 1 Immigration, Psychosocial Development: Implications for Africa and the US — Kathleen Stassen Berger ................................................................................................................. 30 “Africa” in Minnesota: New Models of Translocal Culture — Jacqueline Copeland Carson . 60 Criminal Convictions That Can Cause Non-U.S. Citizen Removal From The United States — Oláyínká Dánsàlámì ........................................................................................................ 71 African Immigrants in the Washington DC Metropolitan Area: Immigration Waves and Community Building — Kinuthia Macharia ................................................................... 79 Living In Paradise?: Africans In America— Femi Ojo-Ade ...................................................... 111 Rotatory Credit Schemes: A Comparative Analysis of an African Traditional Economic Institution in Contemporary Africa and its Diaspora — Iheanyi N. Osondu ................ 138 Oromo African Immigrants’ Experiences with Child Care — Deborah Ceglowski, Jaesook Gilbert, Greg Wiggan, Tekla Johnson, and Rosemary Traore ...................................... 166 Return Migration to Asmara, Eritrea: Readjustment Challenges — Berhane Keleta Chirum .. 221 Book Reviews Creating Africa in America: Translocal Identity in an Emerging World City — Jacqueline Copeland-Carson............................................................................................................ 245 Embracing the Infidel: Stories of Muslim Immigrants on the Journey West — Terri Bennett . 254 Film Reviews J’y Crois - I Believe in it: The Road to Decentralization in Mali, 2004 — Ekerete Udoh ........ 256 In Rwanda We Say…The Family That Does Not Speak Dies, 2004 — Ekerete Udoh ............ 258 The Price of Aid, 2004 — Ekerete Udoh .................................................................................. 260
Topic:
Migration, Diaspora, Immigration, Film, Credit, Identity, and Child Care
Political Geography:
Africa, Rwanda, Eritrea, Mali, and United States of America