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AfricaJanuary 5 2004

Cameroon’s refreshing wind of change

Helena Frith Powell talks to Paul Fokam, chairman of Afriland First Bank. He outlines how the bank intends to become a leader on the continent, while remaining relevant to Africans and working to reduce levels of poverty.
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It is often said that there has been nothing new coming out of Africa in banking circles since the time of Pliny. Cynics say that if you substitute the mercantile might of the Romans for the multilateral lending of organisations such as the World Bank and the African Development Bank, nothing has changed at all.

There is little private sector involvement on the continent, with the exception of South Africa – and whenever the South Africans extend out of their home base, they come unstuck. So it is encouraging to see a Cameroon-based bank working to attain international standards and offering an international service to its clients.

Outspoken chairman

Afriland First Bank was founded in 1987 under the name of Caisse Commune d’épargne et d’investissement (CCEI). Unlike many sub-Saharan entities, it does not exist solely to interface between government and multilateral lending and the private sector. In fact, its outspoken chairman, Paul Fokam, is not afraid to criticise the World Bank for its lending policy.

“I am really critical about the World Bank,” says Dr Fokam. “Its policy is not good, its behaviour is not acceptable, it cannot aid development. However, it is unlikely to change, because it is protecting some entities. It is also too bureaucratic, it has a vision and cannot change it. It’s too late for change, no critic can oblige them to change, but they have come to one assumption and think they can generalise to all the countries in the world. Management is a social science before being mathematics. Take this into consideration. The ADB affiliate is the same.”

Such straight talking is refreshing. But can the bank afford to upset potential lenders? Dr Fokam says that his bank, which is aiming to be in the top three of banks in Cameroon, has two compartments: one commercial and one focusing on investment banking.

“Helping the African entrepreneur is our core business,” he says. “We do corporate finance work such as advisory, as well as running a venture capital fund – for example, a company comes and asks for help to raise money internationally. Recently we did a deal for a company processing medicinal drugs. We work with partner banks all over the world to help raise the money.”

Multilateral link

One of the core partners that Afriland has found is the Export-Import Bank of the United States (Eximbank). So he hasn’t abandoned the multilaterals altogether?

“It took a long time to negotiate this deal, but we are very happy with it,” he says. “We signed a contract with Eximbank to promote business between the US and Africa. It is not a fixed line of credit, but a master agreement, which means we are selected as the key bank to represent Eximbank in central Africa.”

Under this agreement they have already provided financing of $5m for a telecom company, as well as another line of credit for an exporter of flowers to the US of $8m.

Key differences

Dr Fokam says that the bank’s goal is to be a competitive bank first in Africa, and then in other countries. In commercial banking they offer exactly the same services as the other banks except three key areas. First, they are trying to innovate and to put in the market new products that are really relevant to the African culture. For example, they have introduced a product called flash cash, a product to connect the informal and formal sectors of the economy. “The problem was that the two sectors were parallel and needed to be connected,” says Dr Fokam. “It is a bit like a traveller’s cheque, you can either sign it in front of banker, or you can use it as a banknote. You can use it to pay anything, settle a debt, anything, corporates or individuals. The bank guarantees it. It is not a cheque but a banknote.”

Second, they offer a special Islamic account for Muslims who want to use their money for the pilgrimage to Mecca. “They use the interest to develop commercial activities and use the profit from those to pay for their pilgrimage,” says Dr Fokam.

Financing for the poor

Third, Afriland claims to be a social bank. “We are concerned about the level of poverty in Africa, especially in the countryside,” he says. “To be efficient, it is very important to use a part of the profits to fight against poverty. That is why we are the sponsor for a network called Mc2, a micro-development bank that provides financing only for the poor.”

Unusually for a banker, Dr Fokam is also an intellectual. He is the author of a book called Et si l’Afrique se réveillait?, which discusses the problems of Africa and suggests some solutions.

“I have been personally involved in research for 15 years in how to overcome the poverty in Africa. My research concludes that it’s possible to overcome the poverty, but an African can only overcome poverty if he believes in himself. An individual can only push somebody who can initiate his own development. One of the key things to overcome is laziness.”

He clearly does not suffer from any of these problems. Since founding the bank 16 years ago, he has built a banking and insurance group that is already looking to expand out of Africa. It has set up an office in China to connect people from Asia with those in Africa.

He is also building links in Malaysia, Singapore and South Korea. But he recognises that Africa is his core business.

“We are the leaders; every year we put in the market one or two innovative products,” he says. “We are combining modern management techniques with the African culture. We go and see what is very good in Africa and merge that with modern management,” he says. “Then we add management of human resources. In Africa, the culture of management is to try to avoid conflict, this is our culture, this is why we never have strikes.”

Dr Fokam has big plans for the future. He plans to open offices in the US, as well as covering the whole of Africa. But he is aware of the possible problems. “The major obstacles are the political situation, the political risk, environment risk and political stability,” he says. “Each country in Africa is really rich but there are obstacles.”

For the moment, at least, he has the help and support of US Eximbank.

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Read more about:  Africa , Cameroon