Formal and informal finance and rural household welfare in Mezam division of the North-West Region of Cameroon: A comparative assessment

Louis Atamja (), Sungjoon Yoo () and Dongjoo Lee ()

Journal of Contemporary Research in Business, Economics and Finance, 2025, vol. 7, issue 2, 1-15

Abstract: The purpose of this study is to comparatively assess the impact of formal and informal finance on rural household welfare in the Mezam division of the Northwest region of Cameroon. A probit regression model was used to examine the determinants of households’ credit access, while a Propensity Score Matching and an Endogenous Switching Regression model were used to analyze the impact of formal and informal finance on household welfare. The results from the probit regression model indicate the importance of occupation, extension services, and household participants in accessing credit. On the other hand, a prediction from the propensity score matching and endogenous switching regression model confirms that access to either formal or informal finance has an impact on welfare, with informal finance having a positive and significant impact.

Keywords: Cameroon; Endogenous switching model; Formal and informal finance; Household welfare. (search for similar items in EconPapers)
Date: 2025
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