An appraisal of factors affecting sustainability of Microfinance Institutions in Cameroon

Abstract

Microfinance was born with the aim of satisfying people excluded from traditional financial services. However, MFIs face a dual objective of serving the poor while remaining sustainable. Highlighting the determinants of the sustainability of MFIs in Cameroon through financial objectives is the subject of this article. Our study aims to answer the question of what are the criteria that allow a Cameroonian EMF to ensure its sustainability. The objective of this work is to understand the factors that are at the base of the lifespan of MFIs in Cameroon. Specifically, it is a question of making a connection between the lifespan of MFIs and their financial objectives. To answer the research question, we hypothesized that the financial goals of MFIs have an impact on their lifespan. Our study required the use of primary data. These data were collected in the field using a questionnaire. Our target population was made up of independent microfinance institutions. A sample of 35 MFIs was selected using the quota method, which consists of setting the desired proportions of companies based on available statistics on the population studied and questioning any company provided that the fixed proportions are respected. Given the small size of our sample and the qualitative nature of our variables, we deemed it necessary to use the chi-square test. This allowed us to arrive at the results according to which for Cameroonian MFIs to be sustainable, it is necessary to take into account financial objectives such as the turnover business, profits, dividends paid and shareholder satisfaction.

Classification JEL: G21, Q56

Paper Type: Empirical Research