Cameroon: Financia Capital pioneers the use of mobile money services in an IPO operation

Investors interested in La Régionale S.A’s IPO can now subscribe using Orange Money. This was revealed in the IPO notice ad published in the framework of this operation arranged by Financia Capital.

This is the first time mobile money technology is being used in stock exchange operations in Cameroon. By allowing Cameroonian investors to buy shares using a mobile payment service, Financia Capital intends to capitalize on the strong penetration of this payment method in Cameroon and democratize access to stock exchange services.

Introduced in Cameroon by mobile network operator in 2006, Mobile Money is by far the most widely used electronic payment method in the country currently. Officially, Orange and MTN (the two mobile market leaders) have nearly 10 million customers (4.5 million for Orange and 5 million for MTN) using their respective mobile payment services. According to figures from the International Monetary Fund (IMF), in 2017, Mobile Money transactions reached XAF3, 5000 billion in Cameroon, against XAF300 billion in 2016.

Such a tremendous rise in the volume of transactions within just one year can be explained by the diversification of mobile money uses in the country. Indeed, initially used for merchant payments, Mobile Money was then officialized by the government as a payment method for some taxes and official examination fees.

During the said period, both public and private school officialized mobile money as a payment method for tuition fees. With the payment technology’s use in La Régionale's fund-raising campaign (whose subscriptions will open on February 9th and end on February 26th, 2021), this payment method will be used for the first time to purchase shares for a company’s IPO operation.  

In the press release published on February 3rd, 2021, announcing the operation, Charles Rollin Ombang Ekath (CEO of La Regionale) explained that the operation was initiated to raise funds for the transformation of that renowned microfinance institution into a universal bank.

"The aim of this operation is to raise the capital from XAF8.04 billion fully paid up and validated by the Cobac [regulator of the Central African banking sector]  to over XAF15 billion for the transformation of La Régionale into a universal bank," he indicated.

Established in 1993, La Régionale is a leading local microfinance institution. However, the institution went through some trouble times. In early 1998, 28 years after its launch, La Régionale had accumulated losses estimated to be over XAF1 billion. Because of that poor performance, its management was dismissed, and later that year (in 1998), shareholders injected fresh capital into the institution. Thanks to those new contributions, the microfinance institution started regaining its lost grounds.  

As of December 31st, 2020, its net equity was about XAF10 billion, its net profit XAF1.5 billion and its customer base was 110,000 clients through a network of 41 branches in Cameroon. It also has an international presence with four branches in Gabon.