Effect of internal governance mechanisms on credit risk in Cameroonian banks: results of the quantitative survey

Abstract

The literature on banking governance highlights credit risk as one of the main causes of bank failure. The objective of this article is to measure the effect of internal governance mechanisms on the credit risk of Cameroonian banks. Through a quantitative approach applied to all banks operating in Cameroon in 2023 and using a questionnaire to collect data, the article aims to shed new light on the issue of credit risk from the perspective of banking governance theory, by answering the following question: What is the influence of internal governance mechanisms on the credit risk of Cameroonian banks? The results reveal that internal governance mechanisms exert a significant influence on credit risk in Cameroonian banks and that they depend largely on local specificities. This study provides relevant insight to monetary authorities on the consideration of sociological and anthropological aspects in the control of credit risk in banks in a developing country.