Research Article
The Effect of Informal Financing on the Performance of Very Small and Small Enterprises (VSSEs) in the Buea Municipality, South West Region Cameroon
Moutie Giscard Valery*,
Tohsam Edwin Kombem
Issue:
Volume 12, Issue 1, February 2026
Pages:
1-11
Received:
16 December 2025
Accepted:
29 December 2025
Published:
23 January 2026
DOI:
10.11648/j.ijfbr.20261201.11
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Abstract: Objective –This article examines the effect of informal financing on the performance of Very Small and Small Enterprises (VSSEs) in Buea municipality, South West region Cameroon. Compared with past research, this work specifically aims: firstly to assess the effect of financing from informal money lenders on the performance of VSSEs. Secondly to evaluate the effect of financing from Rotating Savings and Credit Associations (ROSCAs) on the performance of VSSEs. And lastly to Investigate the effect of financing from family and friends on the performance of VSSEs. Methodology/Technique – This study adopts a descriptive research design and a stratified sampling strategy, with a sample size of 13 enterprises. Data were collected using questionnaires and analyzed with SPSS software through basic statistical tools such as frequencies and percentages. Findings – On one hand the findings reveal that, financing from ROSCAs and informal money lenders has a positive and significant effect on the performance of VSSEs. On the other hand, the findings show that financing from family and friends is not statistically significant. Meanwhile ROSCAs were found to be highly significant in improving performance. And despite the challenges in accessing funds from informal money lenders, their financing contributes positively to enterprise performance. Novelty/Recommendations – Compared with past research, this study emphasizes the role of informal financing sources in enhancing small enterprises performance. It recommends; Formalization and regulation of informal money lenders with clear guidelines on interest rates, repayment terms, and borrower protection. Another recommendation is strengthening the efficiency of ROSCAs through financial literacy, better record keeping and structured savings. And lastly by limiting reliance on family and friends financing to short-term or emergency support.
Abstract: Objective –This article examines the effect of informal financing on the performance of Very Small and Small Enterprises (VSSEs) in Buea municipality, South West region Cameroon. Compared with past research, this work specifically aims: firstly to assess the effect of financing from informal money lenders on the performance of VSSEs. Secondly to ev...
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Research Article
Revisiting Funding Strategy-financial Performance Dynamics: The Moderating Influence of Firm Size in Kenya’s Microfinance Sector
Issue:
Volume 12, Issue 1, February 2026
Pages:
12-27
Received:
18 December 2025
Accepted:
4 January 2026
Published:
23 January 2026
DOI:
10.11648/j.ijfbr.20261201.12
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Abstract: The purpose of the study was to examine the moderating effect of firm size on the relationship between funding strategy and the financial performance of deposit-taking microfinance institutions (DT-MFIs) in Kenya. The study was informed by the Modigliani-Miller Theorem and Economies of Scale Theory. The positivist philosophy was adopted, which informed the adoption of a descriptive research design to source data from 13 DT-MFIs in Kenya. The study extracted annual secondary data (2013 – 2022) from the bank supervisory report by the Central Bank of Kenya (CBK). The data sourced was analysed based on a panel generalised least squares (GLS) model that adjusted for group heteroskedasticity, serial correlation and cross-sectional dependence. The panel regression analysis showed that the funding strategy had a significant effect on all proxies of financial performance of DT -MFIs in Kenya. Firm size was a positive moderator on the relationship between funding strategy and the financial performance of DT-MFIs as measured by ROE and Z-score. The research suggests that deposit mobilisation should be reinforced in conjunction with improved risk management, decreasing dependence on expensive wholesale funding, and increasing equity capital to boost profitability and stability. Additionally, it calls on DT-MFIs to aim for strategic growth and capital accumulation, while encouraging policymakers to facilitate consolidation, digital growth, and the establishment of more robust regulatory buffers to strengthen the resilience of the sector.
Abstract: The purpose of the study was to examine the moderating effect of firm size on the relationship between funding strategy and the financial performance of deposit-taking microfinance institutions (DT-MFIs) in Kenya. The study was informed by the Modigliani-Miller Theorem and Economies of Scale Theory. The positivist philosophy was adopted, which info...
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Research Article
Nexus Between Financial Inclusion and Financial Innovation: Empirical Insights from G20 Countries
Animesh Saha
,
Pranesh Debnath*
Issue:
Volume 12, Issue 1, February 2026
Pages:
28-38
Received:
20 December 2025
Accepted:
4 January 2026
Published:
23 January 2026
DOI:
10.11648/j.ijfbr.20261201.13
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Views:
Abstract: The relationship between financial innovation and financial inclusion remains an underexplored area in economic research, despite ongoing debates about the interconnectedness of these two critical factors. Financial innovation, characterized by the development and adoption of new financial products, services, and technologies, has the potential to significantly enhance financial inclusion by improving access, affordability, and convenience of financial services. However, empirical evidence on how these innovations directly influence the extent and quality of financial inclusion across different economies, particularly among the G20 countries, is limited. This study examines the relationship between financial innovation and financial inclusion within the context of G20 countries. To attain the objective, the paper constructs a Financial Inclusion Index (FII) to provide a comprehensive view of financial inclusion. Similarly, the Financial Innovation is measured using a financial innovation index computed by means of internet accessibility and mobile accessibility by following PCA method. In pursuit of the study's goals, it utilizes secondary data spanning from 2014 to 2022, which was obtained from the World Bank and the IMF Financial Access Survey (FAS). The findings reveal a significant relationship between financial inclusion and innovation among the G20 nations. The result also reveals that financial innovation positively impacts financial inclusion. However, the findings are limited to examining the nexus between financial inclusion and financial innovation within selected G20 countries. As an original contribution to the field, this research encompasses various dimensions that previous authors have considered. This study addresses this gap by examining the empirical nexus between financial innovation and financial inclusion, aiming to provide insights into how technological advancements shape financial accessibility and inclusion outcomes in diverse economic contexts.
Abstract: The relationship between financial innovation and financial inclusion remains an underexplored area in economic research, despite ongoing debates about the interconnectedness of these two critical factors. Financial innovation, characterized by the development and adoption of new financial products, services, and technologies, has the potential to ...
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