Abstract

The sustainability of small and medium-sized enterprises (SMEs) in Cameroon is a critical factor in the country’s economic growth and development. SMEs represent the backbone of the economy, providing employment, driving innovation, and contributing to GDP. However, one of the major challenges facing SMEs in Cameroon is limited access to credit, which directly impacts their long-term sustainability. This study examines the impact of credit accessibility on the sustainability of SMEs in Cameroon, exploring how access to financial resources enables businesses to endure economic fluctuations, expand operations, and sustain growth over time.

The research employs a mixed-methods approach, combining both quantitative and qualitative data to thoroughly assess the relationship between credit availability and SME sustainability. A survey was conducted among SME owners and managers across different sectors in Cameroon to gather primary data, while in-depth interviews with financial experts and government officials provided additional insights. The study also analyzed secondary data from financial institutions, including credit disbursement records, repayment rates, and SME performance indicators. Sustainability was measured in terms of business survival rates, profitability, revenue stability, and ability to reinvest in operations.

The findings of the study reveal that access to credit has a significant positive impact on the sustainability of SMEs in Cameroon. Businesses with better access to credit are more likely to survive economic downturns, maintain consistent revenue streams, and invest in business expansion and innovation. Credit allows SMEs to manage operational costs, purchase raw materials, and finance capital expenditures, all of which are crucial for business continuity. Furthermore, access to credit enhances SMEs’ ability to compete in the market by enabling them to scale up operations and take advantage of growth opportunities.

Despite the clear benefits of credit access, the research identifies several barriers that limit the ability of SMEs in Cameroon to obtain financing. High interest rates, stringent collateral requirements, and complex loan application processes are some of the key challenges faced by SME owners. Additionally, many SMEs in the informal sector struggle to meet the formal requirements of banks and other financial institutions, which limits their access to credit. The study also highlights the role of microfinance institutions and informal lending groups in filling the gap left by traditional banks, although these sources of credit often come with higher costs and shorter repayment periods.

A critical aspect of the research is the exploration of the relationship between financial literacy and credit access. SME owners with a strong understanding of financial management are more likely to secure credit and use it effectively to sustain their businesses. Financially literate entrepreneurs are better equipped to navigate the complexities of loan agreements, manage debt, and reinvest profits into their businesses. This underscores the importance of providing financial education and support to SME owners as a means of improving their creditworthiness and enhancing the sustainability of their enterprises.

The study also examines the role of government policies in facilitating access to credit for SMEs. The findings suggest that while there are several initiatives aimed at supporting SME financing in Cameroon, such as credit guarantee schemes and interest rate subsidies, these programs are often limited in scope and reach. Furthermore, bureaucratic inefficiencies and a lack of coordination between government agencies and financial institutions hinder the effective implementation of these policies. The research recommends that the government take a more proactive approach in promoting financial inclusion by streamlining credit access programs and ensuring that they are accessible to SMEs across all sectors of the economy.

In conclusion, access to credit is a vital factor in the sustainability of SMEs in Cameroon. By improving access to financing and addressing the challenges faced by SME owners, the country can foster a more resilient and sustainable SME sector that contributes to long-term economic development. The study offers practical recommendations for financial institutions, policymakers, and SME owners on how to enhance credit accessibility and ensure the sustainability of small and medium-sized enterprises in Cameroon.

Keywords: Access to credit, SME sustainability, Cameroon, financial performance, microfinance, financial literacy, government policy, credit barriers, economic development.