Financing Enterprises to Boost Employment in Cameroon

Abstract

Cameroon has 93969 different enterprises (NIS, 2010) operating in varied fields aimed at fostering economic growth. The enterprises confront challenges such as infrastructural weaknesses, unfavorable business climate and poor governance (World Bank, 2013), thus leading to disappointing results in terms of economic growth. Such a situation has attracted much attention from businessmen and policy-makers alike as to what to do in order to reverse the situation for favorable job creation and economic growth. The paper aims at examining the impact of external financing to enterprises in order to offer employment in Cameroon. Econometrically analyzing a sample of 180 loan recipients and 273 non-loan recipients, using the decomposition technique of Blinder-Oaxaca (1973), results show that enterprises that received external funding were more performing and creating jobs than those that did not, especially those operating in Yaoundé and Douala. A positive gap of total number of employees existed between loan and non-loan recipients estimated at 15 employees per enterprise. Also, such loans received positively amplify the actions of productive factors in Yaoundé and Douala considering the number of establishments and businesses. Equally, there exist a difference due to observable characteristics of enterprises and their coefficients, contributing 181.1 and 140.12% respectively for loan and non-loan recipients. We therefore recommend that the state, financial institutions and enterprises should work in synergy to collectively improve on enterprise financing so as to boost employment in Cameroon that can lead to economic growth.