Agricultural Credit Risk Management and Microfinance Performance in Cameroon

Dr. Mbu Daniel Tambi, Mr. Nono Defo Eddy Damaris

Volume 1 Issue 3 | Jul 2018

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Abstract

Risk management with a view to improving financial performance is one of the major challenges currently faced by Microfinance Institutions. Methodologically, the study make used of the multiple correspondence analyses to construct an agricultural credit risk management indicator and used ordered probit model to estimate the result, using data collected on a sample of 100 microfinance personnel. The result shows that risk management has a positive and significant impact on the financial performance of Microfinance Institutions in Cameroon. In terms of policy, lenders should intensify follow up on borrowers in order to minimize credit risk, while the decision makers should subsidize Microfinance Institutions and farmers to alleviate poverty and reduce interest rate.