| Many empirical studies have reveal that significant two enduring problem facing MFIs today in the world is how to minimized loan delinquency/default and attain sustainability especially financial sustainability.Several studies have been conducted to determine the factors affecting the loan delinquency/default in MFIs and factors affecting financial sustainability of MFIs.However,there are insufficient studies conducted on these areas in Cameroon and more to that no study in Cameroon has attempted the causality between these two significant problem areas affecting MFIs survivability.Therefore,this study was conducted to fill the loophole.The aim of the study was determining the extent to which loan delinquency and default measure as loan portfolio at risk(PAR rate)will influence financial sustainability of Cameroonian MFIs.This study is based on quantitative research approach using panel data robust fixed regression as the main data analysis technique.The study was based on a 3years secondary data obtained from the annual bulletin of ACMFI and mix-market database for 10 selected MFIs in Cameroon.The study found that loan portfolio at risk inversely affects significantly the financial self-sufficiency as a proxy for financial sustainability of MFIs in Cameroon.From the findings when the loan portfolio at risk rate increase by 1%the financial sustainability of MFIs in Cameroon will decrease by 1.151%.Also other explanatory variables like Gross loan portfolio,Amount of equity,return on asset rate,debt-equity rate,deposit-loan rate,and operating asset rate all influence the financial sustainability of Cameroonian MFIs though the influence seems insignificant except for donations and deposit mobilized the has a significant positive effect on Cameroonian MFIs.Conclusively study also found that MFIs in Cameroon are not financially self-sufficient relative to their counterpart in other parts of Africa.This study recommends mechanisms for microfinance institutions in Cameroon to minimize their loan delinquency/default(loan portfolio at risk)and increase their donations and deposit mobilization(commercialization)in order to increase their financial sustainability. |
PDF Full Text Request