The Influence of Credit Monitoring on the Operational Performance of Branches of Commercial Banks in Cameroon

Author

Eyong Renata Orock

Abstract

 Purpose: This study was carried out to investigate the influence of credit monitoring on the operational performance of branches of commercial banks in Cameroon. Four credit monitoring of the measurement criteria for branches of commercial banks were involved in the analysis. These are review of the borrower’s financial statements, monitoring of borrower’s cashflow, credit monitoring committee and monitoring environment. The operational performance of the branches of commercial banks included the financial operational performance and the non-financial operational performance of the branches. Specifically, the study investigated how the borrower’s financial statements, monitoring of borrower’s cashflow, credit monitoring committee and monitoring environment influence the operational performance of branches of commercial banks in Cameroon. 

Materials and Methods: The study adopted the survey research design and used primary data collected from 216 branches of commercial banks operating in Cameroon through the administration of questionnaires. Data was analysed using both descriptive and inferential statistics with the help of SPSS and STATA. 

Findings: The results of the study reveals that borrower’s cashflow has the strongest and most significant positive influence on operational performance of branches of commercial banks in Cameroon, with a coefficient of 0.0790 for overall operational performance This implies that branches that effectively monitor borrower’s income, expenditure, operating cashflow, and other cashflow sources are more likely to experience improve operational financial performance, operational non-financial performance and overall operational performance. 

Conclusion and Recommendations: The study concludes that the regression results indicate credit monitoring has a significant positive influence on the operational performance of branches of commercial banks in Cameroon. This means that effective post-disbursement monitoring of borrowers is an important mechanism for improving loan quality, reducing default risk, strengthening financial outcomes, and enhancing overall branch performance.

Keywords

Credit monitoring, Borrower’s financial statement, Operating cash flow, Monitoring environment, Credit monitoring committee, Performance, Commercial Bank Branches.

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