Interested in buying shares listed on the Central African Securities Exchange (BVMAC), based in Douala Cameroun, through mobile money? La Régionale, a microfinance bank in Cameroon, has just launched a major innovation to make this happen. Consequently, subscribers to the bank’s Initial Public Offering (aka IPO, or simply the first sale of shares by a company to the public) can now also buy the shares offered for sale via Orange Money. This will be the first in Cameroon, and in the whole of Central Africa.
“The objective of this operation is to bring the capital of 8.04 billion FCFA, fully released and validated by Cobac [Central African Banking Commission], to more than 15 billion ($27.5m), with a view to transforming La Régionale as a universal bank,” explains Rollin Ombang Ekath, the Managing Director of La Régionale.
Here Is What You Need To Know
- By giving Cameroonian investors, for the first time, the possibility of buying shares of a company on the stock exchange via the mobile payment service of the local subsidiary of the telecoms operator Orange Cameroon, La Regionale intends to democratize access to stock exchange services.
- Introduced in Cameroon in 2006 by mobile telephone operators, Mobile Money is certainly the most common electronic payment method in the country today. Officially, Orange and MTN, the two leaders in the mobile market, have nearly 10 million customers (4.5 million for Orange and 5 million for MTN) on their respective mobile payment services. According to figures from the International Monetary Fund (IMF), transactions via Mobile Money in Cameroon peaked at 3.5 trillion FCFA in 2017 ($6.4bn), against 300 billion in 2016.
- This explosion in the volume of transactions over one year can be explained by the diversification of the uses of Mobile Money in the country. In fact, initially used for merchant payments, Mobile Money was later adopted by the government for the payment of certain taxes and official exam fees. Virtually all schools, both public and private, have also adopted this payment method for paying tuition fees.
- Thanks to the fundraising of La Régionale, whose subscriptions begin on February 9 and end on February 26, 2021, this method of payment will make it possible, for the first time, to buy the shares of a company within the framework of ‘an IPO’.
- A microfinance institution among the leaders of the local market, La Régionale was founded in 1993. After launching its activities 28 years ago, the company recorded a deadweight loss of more than one billion FCFA at the start of the year. year 1998. This led to the suspension of its general management. But, at the end of that year, this microfinance institution regained its serenity with new capital contributions from its shareholders.
- As of December 31, 2020, this microfinance institution posted net equity of around 10 billion FCFA ($18.3m), and maintains a portfolio of 110,000 clients through its network of 41 branches in Cameroon. Its international presence is visible in Gabon, where La Régionale has a network of four branches.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
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