CHAPTER 3:
METHODOLOGY OF THE STUDY
3.1 INTRODUCTION
Having reviewed much of this work with regards to the
study in chapter 2, this chapter on methodology will analyse the methods and
procedures that will be employed in the course of the study. In this section,
the methods to be used in analysing the collected data are of great importance.
This work which examines the impact of risk management in reducing the risks of
financial institutions in Cameroon will involve both qualitative and
quantitative data, as the collected data will be used to testify the hypothesis
and the objectives underlying the study while tables are mostly used with
qualitative data, it will also be accompanied with charts like bar charts as
well as percentages and averages. It will also be accompanied by quantitative
statistical tools like standard deviation. The use of ratios will be done on
passed financial statements of randomly sampled selected financial institutions
to analyse the impact of risk on investment decision making in financial
institutions.
3.2 BACKGROUND INFORMATION TO THE STUDY AREA
3.2.1 SOCIAL BACKGROUND
Cameroon is a central African country open upon the world
through its sea and the Atlantic Ocean. It is a bilingual country where English
and French are coexisting in harmony as official languages. The political
capital is YAOUNDE and the Cameroon is a member of the commonwealth. In 2005,
the Cameroonian population was estimated to 16.4 millions inhabitants. The
annual growth rate of the population reaches 1.93%. In 2005 the fecundity
indices was high (43.5 children/woman) whereas the infant death rate was
estimated to 68%o and the life expectancy was 48 years. About 51% of
Cameroonians live in town in 2003. The major towns are YAOUNDE (1372800
inhabits) Douala (1448300 inhabits) in 1999. (Microsoft Encarta
2006.)
3.2.2 EDUCATIONAL BACKGROUND
More than 60% of the population has less than 25 years. The
school is compulsory from 6 to 11 years. In 2002, 33 per cent of children were
registered in secondary education and only 5% had access to the higher
education. The University of YAOUNDE built in 1962, coexists with four other
universities such as BUEA, DOUALA, NGAOUNDERE and DSCHANG. Religious schools
are also of great influence in the country since they are subsidised partly by
the government. The alphabetisation rate was 81.1% in 2005 for the entire
population.
(Microsoft Encarta 2006)
3.2.3 POLITICAL BACKGROUND
Since 1990 and the instalment of multipartism, Cameroon has
encountered a hard democratisation of the regime. The president AHMADOU AHIDJO
in 1966, the CPDM (Cameroon popular democratic movement) whose actual leader is
Paul BIYA is the president of the country since 1982. The main opposition
parties are SDF (Social Democratic Front), Anglophone, and the CDU (Cameroon
Democratic Union). The political system is regulated by the constitution of
1972, revised in 1996. (Microsoft Encarta 2006)
3.2.4 CULTURAL AND RELIGIOUS BACKGROUND
About one quart of the population is animist. The Muslims
(22%) are living principally in the north whereas the Christians (33%
Catholics, 17% protestants) are living in the south. The francophone (78%) are
greater in number than Anglophones (22%). Sudanese languages are talked in the
north whereas Bantus languages are talked in the south.
(Microsoft Encarta 2006)
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