Outreach & Sustainability of Microfinance Institutes (MFIs) in the Midst of the Anglophone Crisis in Cameroon: A Comparative Analysis of MFIs Affiliated to CamCCUL Using DEA and Tobit Censored Model for the Period of 2017 and 2020

Abstract

Microfinance and its origin are associated with poverty reduction. Despite increased regulation on Microfinance Institutions, challenges in terms of financial sustainability and social responsibility (Outreach) still persist. The main goal of this paper is to assess the effect of Anglophone crisis on the Outreach and Sustainability of Microfinance Institutes in Cameroon. The Data Envelopment Analysis (DEA) method and the Tobit Censored model were used on data of 40 MFIs affiliated to CamCCUL selected from the Northwest and Southwest Regions of Cameroon given that these are the two regions that have been highly affected by the Anglophone crisis for the period of 2017 and 2020. Findings reveal that there is trade-off between Outreach and Sustainability of MFIs. The Anglophone crisis has greatly affected the efficiency of MFIs located in the Northwest and Southwest regions of Cameroon. However, analysis showed that there was a slight improvement in outreach and financial performance of MFIs in 2020 as compared to the year 2017 when the crisis was at its peak. It was also realised that the size of MFI, its location, subsidies and other related factors have a great influence on their efficiency. The paper, therefore, recommends that the Government should highly subsidise MFIs in the Northwest and Southwest Regions to enable them to survive in the midst of the Anglophone Crisis and MFIs should adopt good governance practices in order to be efficient both in terms of Social Performance (Outreach) and Financial Performance (Sustainability) in this midst of this crisis.