The Performance of Microfinance Institutions in Cameroon: Does Financial Regulation Really Matter?

Microfinance and its origin are associated with poverty reduction. Despite increased regulation on microfinance institutions, challenges in terms of financial sustainability and social responsibility still persist. The main goal of this paper is to assess the effect of financial regulation on the dual performance of microfinance institutions in Cameroon. The Data Envelopment Analysis method and the censored Tobit model were used on data of 169 microfinance institutions of the Cameroon Cooperative Credit Unions League network for the year 2009. The results reveal that the input oriented efficiency level of the network is estimated at 0.422 when return to scale was constant and 0.534 when they were variables. Further findings reveals that elements of financial regulation such as risk coverage ratio and fixed assets coverage ratio significantly compromise MFIs efficiency where as the size of the MFI, the deposit interest rate and belonging to the Anglophone regions significantly has a positive influence on the MFIs efficiency. The paper therefore recommends the adoption of regulatory rules which account for country peculiarities. Keywords: Performance, Microfinance, Financial regulation, DEA, Tobit JEL classification: C14, C24, C61, C67, E44, G21, G28

Dynamic shortfall constraints for optimal portfolios

We consider a portfolio problem when a Tail Conditional Expectation constraint is imposed. The financial market is composed of n risky assets driven by geometric Brownian motion and one risk-free asset. The Tail Conditional Expectation is calculated for short intervals of time and imposed as risk constraint dynamically. The method of Lagrange multipliers is combined with the Hamilton-Jacobi-Bellman equation to insert the constraint into the resolution framework. A numerical method is applied to obtain an approximate solution to the problem. We find that the imposition of the Tail Conditional Expectation constraint when risky assets evolve following a log-normal distribution, curbs investment in the risky assets and diverts the wealth to consumption

Selected macroeconomic determinants and economic growth in Cameroon (1970–2018) “dead or alive” an ARDL approach

Purpose – The purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018. Design/methodology/approach – Data were obtained from the World Development Indicators and applied on time series data econometric techniques. The auto-regressive distributed lag (ARDL) bounds model analyzed the data since the variables had different order of integration. Findings – The results showed long and short runs’ positive and significant connection between economic growth in Cameroon and government expenditure; trade openness, gross capital formation and exchange rate. Human capital development, foreign aid, money supply, inflation and foreign direct investment negatively and significantly affected economic growth in the short and long-runs. Hence, the macroeconomic indicators are not death. Research limitations/implications – The present research paper has tried to capture the impact of nine macroeconomic determinants on economic growth such as the government expenditure (LNGOVEXP), human capital development (LNHCD), foreign aids (AID), trade openness (LNTOP), foreign direct investment (LNFDI), gross capital formation (INVEST), broad money (LNM2), official exchange rate (LNEXHRATE) and Inflation (LNINFLA). However, these variables have the tendency to affect each other in a unidirectional or bidirectional manner. Further, the present research paper is unable to capture the impact of other macroeconomic variable due to the unavailability of data. Practical implications – The study recommends that Cameroon should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with human capital development, foreign aid, money supply, foreign direct investment and moderate inflation. Social implications – Macroeconomic indicators, if managed well, increase economic growth. Originality/value – This paper to the best of the researcher's knowledge presents new background information to both policymakers and researchers on the main macroeconomic determinants using econometric analysis

The Impact of Key Monetary Variables on the Economic Growth of the CEMAC Zone

This study seeks to empirically explore the impact of key monetary policy variables on the economic growth in the CEMAC zone from the period of 1981 to 2015. Carried out using the Ex post facto research design based on the principal components selection approach, the study interacts money supply, interest rate, economic growth, and inflation rate, among themselves and their lagged values using the Vector Auto-regressive (VAR) analytical technique. The Classical quantity theory of money, the Cambridge Cash Balanced, the liquidity preference theory and the Monetarists as theoretical frameworks were explored to appreciate the time trends of the selected variables on the economic growth of the CEMAC zone. Based on the (VAR) methodology, the study reveals that key monetary policy variables influence economic growth of the CEMAC zone in different ways with inflation rate as the impact factor. On the basis of the above findings and the evidence from other studies, lending and inflation rate generated substantial destabilizing impacts on the economic growth, suggesting that the monetary authorities should play a critical role in creating an enabling environment for growth. The determination of the optimal lending rate should reflect the overall internal rate of returns in the productive sectors with due attention to market fundamentals. In line with this, the Central Bank of CEMAC should be given complete instrumental autonomy to operate depending on a set of in-built targets by the individual countries of the zone. Effective monetary targeting and accommodating monetary policies should be designed and implemented as the need arises with little or no political motives

ℒ-Fuzzy Ideals of Residuated Lattices

This paper mainly focuses on building the ℒ-fuzzy ideals theory of residuated lattices. Firstly, we introduce the notion of ℒ-fuzzy ideals of a residuated lattice and obtain their properties and equivalent characterizations. Also, we introduce the notion of prime fuzzy ideal, fuzzy prime ideal and fuzzy prime ideal of the second kind of a residuated lattice and establish existing relationships between these types of fuzzy ideals. Finally, we investigate the notions of fuzzy maximal ideal and maximal fuzzy ideal of a residuated lattice and present some characterizations