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Financial Performances of Microfinance Institutions in Cameroon: Case of CamCCUL Ltd

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  • Moses A. Ofeh
  • Zangue Nguekeu Jeanne

Abstract

Microfinance institutions (MFI) aim at reducing poverty. To achieve such an amazing objective, microfinance institutions in Cameroon have to perform financially well as financial supports from donors are dwelling and irregular. Therefore, to what extent do MFI and industry specific factors determine CamCCUL¡¯s financial performance? By using OLS estimation method to measure the effect of internal and external determinants of CamCCUL¡¯s financial performance in terms of its return on assets, the study exploited a thirty two years secondary data obtained from mix market, CamCCUL¡¯s annual balance sheets and reports to run the regression. The results on the one hand, showed that portfolio at risk, size and operational expenses significantly affect the financial performance of CamCCUL. On the other hand, market concentration had a negative but statistically insignificant effect on CamCCUL¡¯s financial performance. The study therefore recommends that since inefficiency is the bottleneck of CamCCUL, the management should pay great attention to a good expense of management policies or reduce operating costs and credit risk management by employing different technologies to minimize cost. Also, CamCCUL managers should promote training in financial operations, portfolio management, risk assessment and management, management of loan arrears, and strategies, among others.

Suggested Citation

  • Moses A. Ofeh & Zangue Nguekeu Jeanne, 2017. "Financial Performances of Microfinance Institutions in Cameroon: Case of CamCCUL Ltd," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(4), pages 207-224, April.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:4:p:207-224
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    1. Dobdinga Cletus Fonchamnyo & Tony Anyangwe & Ndichia Nana Chantal & Gildas Dohba Dinga, 2023. "Capital structure and financial sustainability: stakes of microfinance institutions in Bamenda, Cameroon," Future Business Journal, Springer, vol. 9(1), pages 1-10, December.
    2. World Bank Group, 2018. "Cameroon City Competitiveness Diagnostic," World Bank Publications - Reports 30164, The World Bank Group.
    3. Arbolino, Roberta & Carlucci, Fabio & Cirà, Andrea & Yigitcanlar, Tan & Ioppolo, Giuseppe, 2018. "Mitigating regional disparities through microfinancing: An analysis of microcredit as a sustainability tool for territorial development in Italy," Land Use Policy, Elsevier, vol. 70(C), pages 281-288.

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    More about this item

    Keywords

    CamCCUL Ltd; Cameroon; financial performance; Micro finance institutions;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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