Financial Innovation, Bank Liquidity and Entrepreneurship Support: The Case of Commercial Banks in Bamenda, Cameroon
Keywords:
Bank Liquidity Position, Commercial Banks, Entrepreneurship Support, Financial Innovation
Abstract
Commercial bank liquidity remains a critical issue globally, especially in emerging regions like Bamenda, Cameroon, where fluctuating liquidity levels pose challenges to financial stability and operational efficiency for banks. The main objective of this study is to examine the effect of Financial Innovation and Entrepreneurship Support on the Liquidity Position of Commercial Banks in Bamenda. Employing a cross-sectional survey design, primary data were collected through structured questionnaires from 39 bank officials, analyzed using a multinomial cumulative probit model to capture the ordinal nature of the variables under examination. The findings indicate that Financial Innovation has a statistically significant effect on bank liquidity, whereas Entrepreneurship Support shows a non-significant positive effect. The model’s goodness-of-fit measures suggest a robust representation of the data, and the results reveal that Financial Innovation has a more prominent effect on liquidity position than Entrepreneurship Support within the context of the study. Based on these findings, it is recommended that banks and policymakers enhance the development and adoption of innovative financial solutions to optimize resource allocation and stabilize liquidity levels. Additionally, fostering entrepreneurship through targeted financial products could further improve liquidity resilience. Strengthening capacity-building initiatives on Financial Innovations and Entrepreneurship Financing is crucial to ensuring sustainable liquidity management and economic growth in Bamenda’s banking sector.
Downloads
Download data is not yet available.
References
1. Bank for International Settlements. (2021). Basel III: The Liquidity Coverage Ratio and liquidity risk monitoring tools.
2. Long, J. S., & Freese, J. (2014). Regression models for categorical dependent variables using Stata (3rd ed.). Stata Press.
3. Nana, D. C., Mbia, E. S., & Ngwa, C. S. (2020). The role of microfinance institutions in promoting entrepreneurial activities in Cameroon. International Journal of Economics, Commerce and Management, 8(3), 1-18.
4. Ngwa, G., & Fuh, J. (2021). Financial innovation and bank performance in Cameroon: A focus on Bamenda. Journal of African Business, 22(2), 226-244.
5. Afolabi, M. O., & Joseph, T. (2020). Entrepreneurial support and financial innovation in emerging markets: Implications for development. International Journal of Entrepreneurship, 24(3), 1-15.
6. Morris, S. S., & Shin, H. S. (2018). Financial innovation and bank liquidity. Journal of Financial Stability, 37, 57-71.
7. Gachanja, L. W., & Muriuki, J. (2022). Government support for small businesses and bank liquidity: Evidence from Kenyan commercial banks. African Journal of Finance and Management, 31(1), 45-63.
8. Nkosi, M., & Phiri, A. (2022). Microloans and commercial bank liquidity in South Africa: An empirical analysis. Journal of Economic and Financial Sciences, 15(3), 1-12.
9. Smith, J., & Doe, A. (2023). Venture capital funding and bank liquidity: Evidence from the United States. Financial Services Review, 32(2), 115-134
10. Zhang, L., Li, T., & Wang, H. (2023). Government entrepreneurship support programs and bank liquidity: Evidence from China. Journal of Banking & Finance, 135, 106777.
11. Abubakar, I., & Adebayo, O. (2023). Financial technology and liquidity performance in Nigerian banks: Evidence from empirical analysis. International Journal of Finance & Economics.
12. Chen, L., Wong, Y., & Zhou, H. (2022). Fintech innovations and liquidity management in Asian banks: An empirical study. Journal of Banking & Finance, 130, 106296.
13. Martinez-Sola, C., Lorenzo, O., & Gómez, A. (2023). Understanding the impact of digital banking innovations on liquidity in European banks. Journal of Financial Stability, 36, 100831.
14. Nyang'aya, R. (2022). The effect of mobile banking on liquidity position of commercial banks in Kenya. Journal of Financial Services Research, 63(3), 345-367.
15. Basel Committee on Banking Supervision. (2010). Basel III: International framework for liquidity risk measurement, standards and monitoring.
16. European Central Bank. (2012). The euro area bank lending survey: A new monthly survey conducted by the ECB.
17. Federal Reserve. (2020). Federal Reserve actions to support the economy: How liquidity measures help the financial system.
18. KPMG. (2018). Global banks' liquidity management: Lessons learned from the financial crisis.
19. Williams, M. (2021). Bank stability during the pandemic: Assessing the liquidity positions of major lenders. Journal of Banking and Finance, 120, 105-120.
20. African Central Bank. (2020). Policy interventions to support banking sector liquidity during the COVID-19 pandemic.
21. African Development Bank. (2009). African Development Report 2009: Financing African Development.
22. Central Bank of Nigeria. (2021). Financial stability report: Overview of the financial system.
23. Mothibi, T. (2019). The impact of mobile banking on traditional banks in South Africa: A case study of the banking sector response to digital evolution. Journal of Financial Innovation, 5(1).
24. South African Reserve Bank. (2017). Financial Sector Regulation Act: An overview of the impact on bank liquidity management.
25. Bank of Central African States (BEAC). (2013). Guidelines on liquidity management for banks in the Central African region.
26. Bank of Central African States (BEAC). (2018). Annual Report on Banking Operations in Central Africa.
27. Bank of Central African States (BEAC). (2021). Banking sector performance report in the context of COVID-19.
28. Cameroon Ministry of Finance. (2011). Report on the financial status of the banking sector in Cameroon.
29. Cameroon Telecom Regulatory Authority. (2020). Statistics on mobile money usage and accounts in Cameroon.
30. Adebisi, J. F., & Afolabi, O. A. (2023). Bank Liquidity and Economic Growth: A Study of Selected African Economies. African Journal of Finance and Management, 29(1), 45-62.
31. Afuah, A. (2022). Innovations in Financial Services and Entrepreneurship. International Journal of Business Management and Economic Research, 13(2), 987-1003.
32. Ayadi, R., et al. (2022). Financial Innovations and Bank Liquidity: Evidence from the Banking Sector in Africa. International Journal of Economics and Finance, 14(3), 21-35.
33. Kibera, L., & Indayi, C. (2023). The Role of Financial Institutions in Supporting Entrepreneurship: A Pan-African Perspective. Journal of Entrepreneurship and Business Innovation, 10(1), 17-28.
34. Ogbongah, V. A., & Ojeifo, S. A. (2021). The Impact of Financial Innovation on Bank Performance in Emerging Markets. Global Business Review, 22(6), 1563-1582.
35. Scherer, L., & Batz, W. (2022). Financial Innovation in Banking: The Future of Financial Services. Journal of Financial Services Research, 67(4), 619-634.
36. BEAC. (2018). Rapport de la Banque des États de l'Afrique Centrale.
37. Cameroon Ministry of Finance. (2011). Annual Financial Review.
38. BEAC. (2021). Rapport Annuel de la Banque des États de l'Afrique Centrale.
39. López, A. M., & Vázquez, R. (2022). Financial intermediation and firm growth: Evidence from small and medium-sized enterprises in Mexico. Journal of Business Research, 142, 589-598.
40. Taktak, N. B., & Neifar, M. (2022). Financial Innovation, Entrepreneurship, and Financial Performance: Evidence from Tunisia. Journal of Innovation & Knowledge, 7(1), 100119.
41. Rojas, C. (2021). The impact of liquidity management on banking performance: Comparative analysis of EMEs and developed countries. Journal of Financial Stability, 59, 100966.
42. Martínez-Sola, C., Lorenzo, O., & Gómez, A. (2023). Understanding liquidity preferences in banking during economic downturns: Evidence from European banks. Journal of Banking & Finance, 148, 106641.
43. Anyanwu, J. C., & Nwafor, M. (2022). The nexus between liquidity preference and financial stability: An empirical investigation. International Journal of Finance & Economics, 27(3), 3801-3813.
44. Allen, L., & Saunders, A. (2004). An introduction to models of risk management and capital adequacy. Journal of Banking & Finance, 28(10), 2515-2521.
45. Laeven, L., & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics, 93(2), 259-275.
2. Long, J. S., & Freese, J. (2014). Regression models for categorical dependent variables using Stata (3rd ed.). Stata Press.
3. Nana, D. C., Mbia, E. S., & Ngwa, C. S. (2020). The role of microfinance institutions in promoting entrepreneurial activities in Cameroon. International Journal of Economics, Commerce and Management, 8(3), 1-18.
4. Ngwa, G., & Fuh, J. (2021). Financial innovation and bank performance in Cameroon: A focus on Bamenda. Journal of African Business, 22(2), 226-244.
5. Afolabi, M. O., & Joseph, T. (2020). Entrepreneurial support and financial innovation in emerging markets: Implications for development. International Journal of Entrepreneurship, 24(3), 1-15.
6. Morris, S. S., & Shin, H. S. (2018). Financial innovation and bank liquidity. Journal of Financial Stability, 37, 57-71.
7. Gachanja, L. W., & Muriuki, J. (2022). Government support for small businesses and bank liquidity: Evidence from Kenyan commercial banks. African Journal of Finance and Management, 31(1), 45-63.
8. Nkosi, M., & Phiri, A. (2022). Microloans and commercial bank liquidity in South Africa: An empirical analysis. Journal of Economic and Financial Sciences, 15(3), 1-12.
9. Smith, J., & Doe, A. (2023). Venture capital funding and bank liquidity: Evidence from the United States. Financial Services Review, 32(2), 115-134
10. Zhang, L., Li, T., & Wang, H. (2023). Government entrepreneurship support programs and bank liquidity: Evidence from China. Journal of Banking & Finance, 135, 106777.
11. Abubakar, I., & Adebayo, O. (2023). Financial technology and liquidity performance in Nigerian banks: Evidence from empirical analysis. International Journal of Finance & Economics.
12. Chen, L., Wong, Y., & Zhou, H. (2022). Fintech innovations and liquidity management in Asian banks: An empirical study. Journal of Banking & Finance, 130, 106296.
13. Martinez-Sola, C., Lorenzo, O., & Gómez, A. (2023). Understanding the impact of digital banking innovations on liquidity in European banks. Journal of Financial Stability, 36, 100831.
14. Nyang'aya, R. (2022). The effect of mobile banking on liquidity position of commercial banks in Kenya. Journal of Financial Services Research, 63(3), 345-367.
15. Basel Committee on Banking Supervision. (2010). Basel III: International framework for liquidity risk measurement, standards and monitoring.
16. European Central Bank. (2012). The euro area bank lending survey: A new monthly survey conducted by the ECB.
17. Federal Reserve. (2020). Federal Reserve actions to support the economy: How liquidity measures help the financial system.
18. KPMG. (2018). Global banks' liquidity management: Lessons learned from the financial crisis.
19. Williams, M. (2021). Bank stability during the pandemic: Assessing the liquidity positions of major lenders. Journal of Banking and Finance, 120, 105-120.
20. African Central Bank. (2020). Policy interventions to support banking sector liquidity during the COVID-19 pandemic.
21. African Development Bank. (2009). African Development Report 2009: Financing African Development.
22. Central Bank of Nigeria. (2021). Financial stability report: Overview of the financial system.
23. Mothibi, T. (2019). The impact of mobile banking on traditional banks in South Africa: A case study of the banking sector response to digital evolution. Journal of Financial Innovation, 5(1).
24. South African Reserve Bank. (2017). Financial Sector Regulation Act: An overview of the impact on bank liquidity management.
25. Bank of Central African States (BEAC). (2013). Guidelines on liquidity management for banks in the Central African region.
26. Bank of Central African States (BEAC). (2018). Annual Report on Banking Operations in Central Africa.
27. Bank of Central African States (BEAC). (2021). Banking sector performance report in the context of COVID-19.
28. Cameroon Ministry of Finance. (2011). Report on the financial status of the banking sector in Cameroon.
29. Cameroon Telecom Regulatory Authority. (2020). Statistics on mobile money usage and accounts in Cameroon.
30. Adebisi, J. F., & Afolabi, O. A. (2023). Bank Liquidity and Economic Growth: A Study of Selected African Economies. African Journal of Finance and Management, 29(1), 45-62.
31. Afuah, A. (2022). Innovations in Financial Services and Entrepreneurship. International Journal of Business Management and Economic Research, 13(2), 987-1003.
32. Ayadi, R., et al. (2022). Financial Innovations and Bank Liquidity: Evidence from the Banking Sector in Africa. International Journal of Economics and Finance, 14(3), 21-35.
33. Kibera, L., & Indayi, C. (2023). The Role of Financial Institutions in Supporting Entrepreneurship: A Pan-African Perspective. Journal of Entrepreneurship and Business Innovation, 10(1), 17-28.
34. Ogbongah, V. A., & Ojeifo, S. A. (2021). The Impact of Financial Innovation on Bank Performance in Emerging Markets. Global Business Review, 22(6), 1563-1582.
35. Scherer, L., & Batz, W. (2022). Financial Innovation in Banking: The Future of Financial Services. Journal of Financial Services Research, 67(4), 619-634.
36. BEAC. (2018). Rapport de la Banque des États de l'Afrique Centrale.
37. Cameroon Ministry of Finance. (2011). Annual Financial Review.
38. BEAC. (2021). Rapport Annuel de la Banque des États de l'Afrique Centrale.
39. López, A. M., & Vázquez, R. (2022). Financial intermediation and firm growth: Evidence from small and medium-sized enterprises in Mexico. Journal of Business Research, 142, 589-598.
40. Taktak, N. B., & Neifar, M. (2022). Financial Innovation, Entrepreneurship, and Financial Performance: Evidence from Tunisia. Journal of Innovation & Knowledge, 7(1), 100119.
41. Rojas, C. (2021). The impact of liquidity management on banking performance: Comparative analysis of EMEs and developed countries. Journal of Financial Stability, 59, 100966.
42. Martínez-Sola, C., Lorenzo, O., & Gómez, A. (2023). Understanding liquidity preferences in banking during economic downturns: Evidence from European banks. Journal of Banking & Finance, 148, 106641.
43. Anyanwu, J. C., & Nwafor, M. (2022). The nexus between liquidity preference and financial stability: An empirical investigation. International Journal of Finance & Economics, 27(3), 3801-3813.
44. Allen, L., & Saunders, A. (2004). An introduction to models of risk management and capital adequacy. Journal of Banking & Finance, 28(10), 2515-2521.
45. Laeven, L., & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics, 93(2), 259-275.
Published
2025-07-17
How to Cite
Nso, M. A., Nkwati, N. D., Sam, N. C., & Watard, H. (2025). Financial Innovation, Bank Liquidity and Entrepreneurship Support: The Case of Commercial Banks in Bamenda, Cameroon. European Scientific Journal, ESJ, 43, 415. Retrieved from https://eujournal.org/index.php/esj/article/view/19783
Section
ESI Preprints
Copyright (c) 2025 Maurice Ayuketang Nso, Njekang Dieudonne Nkwati, Ngoh Christopher Sam, Humphred Watard
This work is licensed under a Creative Commons Attribution 4.0 International License.
