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Financial Literacy and its Effect on Microfinance Institutions' Financial Performance in Bamenda, Cameroon (International Journal of Accounting, Finance, Auditing, Management and Economics)

Research paperInternational Journal of Accounting, Finance, Auditing, Management and EconomicsOctober 202614 pages21 min readWokwen Cordelia, Nicodeme Tenekeu Kemdong, Monta Maimouna Ngoungoure, Lidwin YilemOriginal source

Key number

0.6812 β coefficient

Budgeting literacy effect on MFI financial performance (β) p.2

Summary

The study surveys 50 microfinance institutions (MFIs) drawn from 96 registered MFIs in Bamenda, Cameroon.p.2
Budgeting literacy has a positive significant effect on MFI financial performance (β=0.6812, p<0.001).p.2
Credit management literacy has a positive significant effect on MFI financial performance (β=0.5083, p<0.001).p.2
Savings literacy has a positive significant effect on MFI financial performance (β=0.5941, p<0.001).p.2

Key insights

Correlations with financial performance are 0.684 for budgeting literacy, 0.63 for credit management literacy, 0.695 for savings literacy and 0.608 for the age of the MFI.p.9
A unit increase in credit management literacy is associated with a 0.5083 unit increase in MFI financial performance.p.10
A unit increase in savings literacy effectiveness is associated with a 0.5941 increase in MFI financial performance.p.10
40% of respondents hold a degree, the largest education group in the sample.p.8
The authors recommend that MFIs run financial literacy programs or campaigns for their clients to improve budgeting, lending and saving.p.2

Topics and entities

Banking SME finance and lending

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