The assessment of the impact of risk management in reducimg the risks of financial institutions in Cameroon

2.3. FINANCIAL INSTITUTIONS IN CAMEROON

In this section of our study, we are going to come about with concrete examples of the above-mentioned type of financial institutions in Cameroon and how they function, the basis on which the business is carried out and the legal framework of finance regulations in Cameroon.

2.3.1 CENTRAL BANKING

Cameroon's banking system is closely related to the development of banking in the central African sub-region that is set out to perform his function of a central bank and controller of the monetary and banking policies of the sub-region.

The central bank of central African states (BEAC) is the bank that performs the role of central bank in Cameroon ( www.beac.int). The structure of its management and administration includes a committee of six member's countries (i.e. Cameroon, Equatorial Guinea, Gabon, Central Africa Republic, Congo and Chad). The BEAC also comprise a governor appointed at the conference of the heads of states for CEMAC. The governor and this staff are responsible of the monetary policies of the monetary union of the central Africa sub-region. Monetary policy in Cameroon is conducted by BEAC and its aim is to maintain the external and internal value of currency (comparing banking systems, 2005). The banking commission of central African states (COBAC) is an organ of the code with regard to accountability and public assurances of integrity COBAC assures bank supervision and the coverage of non-blank deposits taking financial institutions by the commercial banks is their accounts and establish necessary reserves requirements.

Commercial banking in Cameroon is controlled by the BEAC. The BEAC is also the institute of emission of the FCFA and controls the stability of the currency (Mark Debels, 2003)

2.3.2 COMMERCIAL BANKING IN CAMEROON

The economic crisis of the 80s has highly affects the banking sector and this has led to the strengthening plan of 1989-19925. The liquidation of the banks and the creation of the SRC (Societe de Recouvrement des Creances du Cameroon), the re-foundation of BICIC (Banque Internationale du Commerce ET de l'Industrie du Cameroun) and of the SGBC (Societe Generale des banques au Cameroun). After the devaluation of the franc CFA in 1994, new reforms were undertaken. After a wave of liquidation (First investment banks, Meridien BIAO bank Cameroon, Credit agricole du Cameroun, closings or failure (International Bank Africa Cameroon, BICIC now BICEC) and recapitalisation (SGBC, Standard Chartered Bank), new banks have been created (Mission economique de Yaounde, 2003).

In Cameroon, 10 commercial banks are authorised by COBAC. These banks include:

- Amity bank, which is constitute of 100 % of private Cameroonians investors.

- BICEC; (Banque Internationale du Cameroun pour l'Epargne ET le Credit) has been privatised in 2000 by the French group Natexis- Banques populaires.

- CBC, commercial bank of Cameroon, whose capital is owned at 90 % by Cameroonians and at 10 % by the German Cooperation

- Afriland First Bank,

- NFC

- Credit Lyonnais Cameroon, 65 % Credit Lyonnais France and 35 % of Cameroonians state. But this bank has been liquidated in March 2007. Now it is CA-SCB which is Credit Agricole Societe Camerounaise de Banque (Cameroon Tribune, March 2007).

- ECOBANK, holding Ecobank Transnational Togo Citibank 100 % Citibank USA standard bank, 66% standard chartered 34 % state of Cameroon.

- SGBC (Societe Generale de banques au Cameroun) 74 % French group societe generale and associates, 26 % by Cameroon state.

- Union bank of Cameroon, which comes from a group of cooperative credit union (CAMCUL) they are represented in other countries of the sub-region such as Gabon, Congo Brazzaville, Chad and Equatorial Guinea.

Source: Mission économique de Yaoundé, (2003).

According to investigation carried out by Economia in the classification of the firsts' African banks, it appears that among the 25 first banks, 6 are Cameroonians (Economia, 2002).