Outreach and performance analysis of microfinance institutions in Cameroon

ABSTRACT: Since people with low incomes do not have access to financial institutions and in most developing countries, only public workers benefit from the services of public banks, the poor and private workers with low incomes cannot borrow from these public banks. Hence, micro financial institutions have become the answer to those who cannot benefit from the financial services of the public banks. This study tries to compare the performance and outreach aspect of the micro financial institutions in Cameroon against the African benchmark. Furthermore, it investigates if there is a tradeoff between performance and outreach. A total of 6 selected micro financial institutions with branches all over Cameroon were chosen for this study. Using the difference of mean test, the findings of the study revealed that generally, the micro financial institutions in Cameroon implemented a low cost strategy and are heavily exposed to default risk. We also concluded a tradeoff between the performance and outreach factors. Micro financial institutions in Cameroon are more focus at making profits rather than reaching out to the poorest of the poor in the communities. …………………………………………………………………………………………………………………………………………………………………………………………………………