CREDIT UNIONS AS CONDUITS FOR MICROFINANCE DELIVERY IN CAMEROON

While financial inclusion is the buzzword now, especially in development finance studies, research on the role of credit unions in the financial inclusion debate in the global South is sparse. This study helps to fill this gap by analyzing the role credit unions play in the delivery of financial services to the ‘unbankables’. We analyze the strategies used by credit unions to reach the unbankables. We show how credit unions have been able to attract new members and offer a variety of financial services through linkages with informal savings and credit clubs, and by using domestic remittance services to build relationships.     

Optimal portfolio choice in the bond market

We consider the Merton problem of optimal portfolio choice when the traded instruments are the set of zero-coupon bonds. Working within a Markovian Heath–Jarrow–Morton model of the interest rate term structure driven by an infinite-dimensional Wiener process, we give sufficient conditions for the existence and uniqueness of an optimal trading strategy. When there is uniqueness, we provide a characterization of the optimal portfolio as a sum of mutual funds. Furthermore, we show that a Gauss–Markov random field model proposed by Kennedy [Math. Financ. 4, 247–258(1994)] can be treated in this framework, and explicitly calculate the optimal portfolio. We show that the optimal portfolio in this case can be identified with the discontinuities of a certain function of the market parameters.     

Trust,cultural norms and financial institutions in rural communities: the case of Cameroon

The success of the operations of formal and informal financial institutions (IFIs) hinges on a high degree of trust. The pivotal role of trust warrants careful analysis regarding its formation in these financial institutions. Using the case of Cameroon, the paper interrogates trust development between formal financial institutions and their clients, and between IFIs and their members. Trust formation occurs via certain cognitive trust-building processes: calculative, prediction, intentionality, capability, and transference processes. The paper argues that trust formation through these processes is predicated upon cultural values and beliefs. It is precisely because of cultural norms that traditional leaders play a role in ensuring that loans granted by formal financial institutions are repaid, thereby serving as principal actors in the functioning of financial capitalism in rural areas. The interplay between culture and financial institutions reconfigures the financial architecture in rural zones. Culture creates a social relational anthropology that is significant for how financial institutions operate.     

Commercial aquaculture in Southeast Asia: Some policy lessons

Globally aquaculture has been increasing rapidly and already accounts for nearly half of all food fish consumed. For developing countries, which produce 90% of the world’s output, aquaculture is a source of protein, employment, income and of foreign exchange. Southeast Asia is an area which has experienced this “blue revolution”. Total aquaculture output in the region increased from less than two million tonnes in 1990 to more than eight million tonnes in 2006. Moreover, the region’s pace of expansion has accelerated. Annual average growth rates in output from 2000 to 2006 were more than double those from 1990 to 2000. Already more than a quarter of food fish in Southeast Asia comes from aquaculture.     

Losing More than Money: Organizations’ Prosocial Actions Appear Less Authentic When Their Resources are Declining

Journal of Business Ethics - Companies often benefit from others’ attributions of moral conviction for prosocial behavior, for example, attributions that a company has a sincere moral desire...     

Resilience and Dynamism of Embedded Financial Transactions in Cameroon

Following the recent financial crisis, institutional economists have issued a “call” for institutionalist research on alternative financial systems. While suggestions have been forthcoming, (for example, in Volume 48, Issue 4 of the Journal of Economic Issues), most have centered on national-level innovations in advanced capitalist countries, prompting further calls for “community” and individual level anti-capitalist financial relations. With this article, we respond to such calls. We show how networks of finance in Cameroon bridge the formal/informal dualisms in lending/savings activities. We demonstrate that any debates about whether to formalize informal financial institutions or leave them alone weaken in Cameroon because, through networks, people access both formal and informal financial institutions for different purposes and at various stages in the life of these institutions. This dynamism explains why, in spite of the growth of money markets in Cameroon, informal financial institutions have not disappeared, nor declined. In fact, they have expanded, contrary to predictions in existing new institutional economics research. While informal institutions have evolved, they have not necessarily become formal banks, microfinance, or stock markets. Rather, the informal financial institutions have adopted and adapted in terms of both lending and saving practices in a country where growing formal financialization has become the norm. Our findings challenge neoclassical and new institutional economics theories about money, credit, and the actors in the money market.     

Farming fish for profits: A small step towards food security in sub-Saharan Africa

In addition to volatile fluctuations due to seasonal or regional factors, food security has two main components; access and availability. This paper presents a diagrammatical model to indicate how aquaculture, particularly private sector aquaculture, can contribute to these components of food security in sub-Sahara Africa. Food accessibility is increased when commercial aquaculture generates employment. Without such employment the poor might never translate their need for food into effective demand. Food availability is increased, either immediately when aquaculture output is sold in the domestic market, or later when the foreign exchange earned from aquaculture exports is used to import food.     

Macroeconomic implications of mortgage loan requirements: an agent-based approach

It is a well-known fact that the housing market, with its associated mortgage securities, plays a crucial role in modern economies. The recent crisis of 2007, triggered by the U.S. real estate bubble, confirms this key role and suggests the importance of regulating mortgage lending. This paper investigates these issues by designing a housing market with a linked mortgage lending instrument in the Eurace agent-based model. Our results show that the presence of a housing market in the model has relevant macroeconomic implications, driven mainly by the additional amount of endogenous money injected into the economy by new mortgages. This additional money generally helps to support and stabilize aggregated demand, thus improving the main economic indicators. However, if the regulation of mortgage lending is too lax, involving an increase in the debt-service-to-income ratio (DSTI), then the additional supply of mortgages no longer enhances macroeconomic performance, and the stability of the economic system is undermined. Based on a number of recent discussions, a regulation of stock control that targets households’ net wealth (a stock), rather than income (a flow) is designed and analyzed. The results show that regulation of stock control can be combined effectively with DSTI to increase the stability of the housing market and the economy as a whole. Interestingly, the regulation based on stock control also directly affects mortgage distribution among households, avoiding excessive concentration. From a policy perspective, our results suggest that the use of a mild flow control regulation, coupled with a stricter stock control measure, fosters sustainable growth and eases first-time buyers access to the housing market, encouraging homeownership.