The aftermath of the crisis which hit the banking system of Central African countries

These countries are six in number, namely, Congo, Chad,… from 1985-1986 is still topical. They relate in particular to the attitude of the banks in this context in terms of the supply of credit. So, for the sake of avoiding past mistakes that caused the crisis (laxity in credit risk assessment etc.), these banks have indeed become so cautious towards companies over time that it is no exaggeration today to qualify their behavior as transactional 

 

This term does not appear explicitly, unlike…(Wamba, 2001a). They abstain from having a relational approach with regard to companies (Ndjanyou, 2001) by relying in particular on quantitative factors alone (accounting data) to assess credit risk, requiring tangible guarantees as a loan condition and by granting only short term loans (short-termism). Their excess liquidity currently seems to be explained by this approach, which effectively results in the refusal of loans to most companies (Wanda, 2007).

 

There are many authors who castigate this logic of rationing

which underlies the operation of local banks, stating in particular that it is totally unsuitable for the objective of economic development (Andely, 1997). The problem they pose is precisely that this rationing affects the main vectors of development, which are small and medium-sized enterprises (SMEs) (Wamba and Tchamambé, 2002).

 

However, from our point of view, stigmatization is often conceived without real empirical studies having been carried out beforehand to understand the real aspirations of companies: the expectations of companies in their banking relationship are very worrying in the field of banking marketing in developed countries (Maque and Godowski, 2009) and are analyzed above all in relation to the type of banking behavior desired (relational or transactional) 

 

On the subject, Perien and Ricard (1995) and Lamarque (2002)…. In addition, analyzes generally focus on the supply side (of banks) to conclude on the phenomenon of rationing mentioned above with regard to macroeconomic data on the quantity of credits offered [Dinamona (1996), (Andely, 1997) etc. ]. On the demand or business side, therefore, the local literature has rarely addressed the question of whether the amount of bank debt present in their financial structure is the result of bank rationing or not 

 

Some analyzes done, based on the low amount… .

 

This article examines this question, which has already been asked in other contexts 

 

In other contexts, this questioning is already… , and puts into perspective the rationing thesis which has long been used to explain the financial structure of companies and SMEs in particular. Indeed, in view of the evolution of the financial environment in Central Africa, banks seem to have lost power 

 

The concept is not common in banking theory. Here,… with regard to companies in the credit relationship. They are no longer the only ones to exercise the business of offering credits. Financial intermediaries such as microfinance institutions (MFIs), also called savings and credit cooperatives, have become real competitors in this area. The competition is all the tougher as they progress 

 

According to COBAC (2006, p.75), the number of second-tier MFIs…in number and have credit supply conditions that are less restrictive than those of the banks (Wamba, 2001a). Admittedly, they only grant microcredits. But, as COBAC (2006) notes, the microfinance sector is becoming increasingly attractive to some commercial banks 

 

These so-called local banks are essentially… .

 

The least we can say is that due to the presence of MFIs in particular, SMEs now have several interlocutors (in addition to banks) when they are looking for credit. They implicitly acquire, from our point of view, a bargaining power with regard to banks which is rarely considered in works on the bank financing of SMEs in Central Africa. It may be that because of this power, the financial structure of these companies is more dependent on endogenous factors than on environmental factors such as the opportunistic behavior of banks. In other contexts, this reasoning underlies the idea that companies are able to anticipate the behavior of banks and consequently avoid the corresponding credits (Houston and James, 1996) or break existing credit links (Perien and Ricard, 1995). It guides the design of this article.

 

The object is to determine the attitude of SMEs with regard to bank loans. The exercise is treated by analyzing the decision of these companies to finance or not their investment in intangible assets (AI) by bank loans. The problem raised is that of the ambiguous role of this financing for the category of investment considered. The results show that the type of credit studied is avoided.

 

 Issue of bank credit issues

Following the thesis of the neutrality of the financial structure as defended by Modigliani and Miller (1958), indebtedness is of little concern to the company since it cannot be used to influence its value. The interest in it begins when the theses of non-neutrality (Modigliani and Miller, 1963) and compromise (Jensen and Meckling, 1976) are defended. In other words, debt is analyzed as both a risk and an opportunity for the company concerned. In this context, however, it is determined by environmental forces alone, including the power or behavior of creditors such as banks, following the rationing theory of Stiglitz and Weis (1981).

 

The importance granted to these forces weakens with the vision of the financial structure as a strategic weapon at the service of business leaders (Barton and Gordon, 1987). Managerial behavior therefore appears to be one of the endogenous factors determining the indebtedness of companies and defining their bargaining power vis-à-vis creditors. Within this framework of analysis, managers can thus avoid bank indebtedness for the purposes, for example, of freeing themselves from the external control operated by banks through the lending activity (Alonzo, Lopez and Sanz, 2005). The passivity of companies with regard to banks on the credit market as assumed by classical financial theory thus appears to be called into question, at least implicitly.