(Ecofin Agency) - The outstanding non-repaid bank credits of the Central African Economic and Monetary Community (Cemac) reached CFA1,917.9 billion on December 31, 2022. These overdue bank credits have multiplied by 4 compared to their level ten years earlier (CFA495 billion at the end of December 2012), as revealed by the Bank of Central African States (Beac) in its 2022 Financial Stability Review, published on Monday, January 8, 2024.

According to the financial institution, the deterioration in the quality of the banks' credit portfolios from 2012 to 2022 is explained by both economic and structural factors. Beac indicates that the increase in the level of overdue claims is linked to deficiencies in risk management and governance within banks. Indeed, the central bank explains that banks are putting more effort into commercial aspects at the expense of a rigorous analysis of credit risk in their portfolios.

Also, the weakening of the budgetary balances of Cemac states, followed by a decrease in economic activity, has led to an accumulation of payment arrears by the states in the banks' credit portfolios.

Beac mentions that this growth in overdue claims "is a major concern for the states in the region, for the Central African Banking Commission (Cobac), the central bank, and credit institutions." This concern is all the more important given that credit risk, in the form of overdue receivables, currently remains one of the main risks facing Cemac banks, the central bank points out.

To limit the progression of these claims, which affect the liquidity of banks and reduce their actions in financing the economy, Cobac requests banks to present plans for the settlement of these overdue claims and the implementation of measures to improve the credit risk management systems of banks.