The relationships between microfinance institutions (MFIs) and commercial banks in Cameroon are dominated by competition and innovations in products, processes, and markets. The supply of microfinance services by commercial banks and the lack of a competitive government‐controlled body are two key factors that spur the competition between commercial banks and MFIs. The two types of financial institutions increase their cooperation as a result of technology and high supply of microfinance services by commercial banks. Regulation can lead to a positive integration of the two sectors.
Local development is an alternative to central government at the local level. Unlike the case with the central government, local development is directed towards local territories usually with the goal of developing their local resources one of which is local infrastructure. This infrastructure is usually financed by public and private sector capitals. The main objective of this study was therefore to prospect the contributions of microfinance social innovations to public local infrastructure development in local councils in the South, Far North, South West, and North West regions of Cameroon. Government's periodicals and literature on microfinance were used for data collection. The data were analyzed according to contributions, determinants, and challenges of microfinance social innovations in the context of public local infrastructure development in local councils in the regions studied. The findings revealed that the North West and South West regions which retain a higher number of Microfinance Institutions are amenable to more microfinance social innovations which are likely to increase public local infrastructure development in their local councils. This is not the case for the South and Far North regions. Meanwhile, the core challenge faced by municipal authorities in creating public local infrastructure is the lack of mastery and non-respect of both non-financial and financial regulations. We suggest based on the findings above that local councils studied should increase stakeholders' cooperation and participation in public local infrastructure development in their localities, if they hope to boost public local infrastructure development in their municipalities.
Ce travail examine les caractéristiques des produits de microcrédit expliquant la performance financière des IMFs au Cameroun. Les données ont été obtenues auprès de 155 IMFs. Les résultats montrent que les remboursements du microcrédit des femmes et des microcrédits solidaires classiques augmentent la performance financière des IMFs par l’autosuffisance opérationnelle (OA). Un résultat positif est aussi réalisé par les IMFs sur les intérêts payés par les clients individuels et les micro entreprises.
Objective –This study determines the nature and the direction of how financial and human capital influence the financing of microentrepreneurs in Cameroon. Compared with past research, this work uses existing microentrepreneurs only, which are considered as the only ones having access to the financing of MFIs.
Methodology/Technique – This study employs an explanatory approach and uses the Five Cs model and primary data to explain the influence of financial capital (capacity, collateral, capital and condition) and human capital (character) on the financing of microentrepreneurs by MFIs.
Findings – On the one hand, the findings show that character, capacity and collateral significantly increase financing of microentrepreneurs by MFIs. On the other hand, the findings reveal that that condition is significant and has an inverse relationship with lending to microentrepreneurs. Collateral was found to be not significant.
Novelty: Compared with past research, this work uses existing microentrepreneurs only, which are considered as the only ones having access to the financing of MFIs. This study examines the relationship between financial and human capital to capacity, collateral capital and condition and character of microentrepreneurs.
Type of Paper: Empirical
Keywords: Capacity; Character Collateral; Condition; Capital; Financing of Microentrepreneurs; Microfinance Institutions.
Reference to this paper should be made as follows: Serge, M.E. 2019. Financial and Human Capital of Microentrepreneurs and Financing by Microfinance Institutions (MFIs) in Cameroon, J. Fin. Bank. Review 4 (3): 98 – 107. https://doi.org/10.35609/jfbr.2019.4.3(3)
JEL Classification: G21, G32, L22, O15.
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