The legal instrument that was promulgated on December 21, 2010 by the Head of State will grant an alternative to classical modes of enterprise financing in Cameroon. It is a well-known fact that business growth in Cameroon has been slowed down by the difficult access of entrepreneurs or business promoters to loans from banks. Banks have been blamed for withholding excess amounts of liquidity with very little attention given to funding the activities of small and medium-size enterprises; hence stalling the latter’s growth. It was in a bid to give enterprises access to equipment, real estate, or other key material resources needed to start or run their business activities that the Head of State, Paul Biya, in line with his vision to transform Cameroon into an emerging economy by 2035, promulgated Law No 2010/020 of December 21, 2010 on the organisation of leasing in Cameroon.

According to the new law, essentially composed of seven chapters, leasing is a credit operation to finance the acquisition or use of movable or immovable property for professional purposes. It involves the rental of specially purchased or constructed capital equipment, tooling equipment or real estate for professional use, by a credit or micro-finance establishment to a company which retains the right to use the equipment for a determined period of time with options to acquire the property. The credit establishment or lessor retains the legal ownership of the property while the company is the lessee with the obligation to pay rents during the duration of the leasing contract. Simply put, companies may now obtain property such as vehicles, construction site engines, power generators, production machines, computer equipment, office furniture and business premises under a lease contract to run their business activities smoothly. They are no longer obliged to buy equipment or build their offices from their business capitals.

Leasing, as an alternative to financing of enterprises, is relatively still unknown and unexploited in Cameroon where its market potential is estimated at over FCFA 400 billion. Only a tenth of this amount is exploited, according to experts meeting in Yaounde, last May 24-26, 2010 during the 13^th pan-African congress of the African Leasing Association held under the theme “Leasing and Economic Growth”. Moreso, leasing provides opportunities for businessmen with little capital or no guarantees to obtain and use equipment needed for production although the legal ownership remains with the credit institution that finances its acquisition. In Cameroon, such credit establishments exist and operate under the umbrella of an association called Cameroon Leasing Association, CAMLEASE.

Experts acknowledge that the new law on leasing opens doors for more companies to participate, at least as contractors, sub-contractors or suppliers, in the economic life of the country to be boosted in the near future by infrastructural projects in hydroelectricity, telecommunications, transport, public works and agriculture, amongst others. The law also demonstrates the importance that government attaches to the financing of businesses whose activities are needed to generate and boost economic growth.