DEVELOPING THE RISK MANAGEMENT IN MFI's IN CAMEROON

The purpose of this thesis was to analyze and improve the risk management strategies in micro financial institutions in Cameroon. The main aim is to develop the risk man-agement strategies in micro financial institutions in Cameroon. The major challenges of this thesis were: (1) to identify the kind of risks that threatens MFIs in Cameroon, (2) to understand how such risks are being managed and (3) to come up with sugges-tions on how management can improve the management of the different risks. Alt-hough the research is done on 30 different MFIs in Cameroon, the research is con-ducted closely with the case company KUCCCUL. The theoretical part of the thesis looks into six major topics; background history of MFIs in Cameroon, the concept of risk management, how risk management is relevant to MFIs, types of risks faced by MFIs, risk management flow chat and the status quo of risk management strategies in Cameroon. The empirical part of the thesis established the fact that there exist financial risks, op-erational risks and systematic risks in MFIs in Cameroon with financial risk posing the most threat to the institution as it affects its liquidity. Being a financial institution it is of interest to MFIs in Cameroon to reduce such risks. The study looks into this risk and how it is currently managed. This actually led to the main goal of the thesis as the researcher was able to find some loopholes in the risk management system and suggest some solutions. Descriptive research design was used with a targeted population of 30 registered credit unions in Cameroon. The study used both primary and secondary data with the primary data obtained through questionnaires and the secondary data obtained from seminar materials organized by CamCCUL and ANEMCAM. The data collected was analyzed using descriptive statistics. The results obtained shows that 66.7% of the risks faced by MFIs in Cameroon is from financial risk, 28.4% of the risks is from operational risk, and 4.7%of the risks is from strategic risks. Findings also shows that poor risk management especially financial risks management has led to a significant average delinquency yearly rate of 36.91%. Delinquent loans greatly affects liquidity and the day to day functioning of the institutions. The researcher was able to meet the objective of the study by being able to provide suggestions on how to better mage risk in MFIs in Cameroo