Financial distress and bankruptcy: Cameroon Micro-Financial Institutions (MFIs)

Tasoh Toh, Gilbert Diom, Mbi Kang Enerstine

Abstract


In this paper we focused to analysis the causes of micro financial sector`s instability and frequent bankruptcy in Cameroon. After a valid theoretical review, we identified three core sector`s destabilizing factors (loan delinquency, competition and limited capital). The regression result noted tense competition as the most influential variable to the shaking state of MFIs. The studied loan delinquency issue also surfaced as a determinant to MFIs bankruptcy. Even though we noted no significant role of limited capital, we believed it has a great contribution, particularly when MFIs are attack by high default. We recommend to the government and regulatory authority to take a step of downsizing at heart. It may create welfare loss, but will help to restore consumers` confidence and make this sector an “oasis” of financial services for the poor Cameroonian again.


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Copyright (c) 2016 Tasoh Toh

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.