Molyko, Southwest Region - Buea, Cameroon


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This study was aimed at examining the role of accounting information system on the performance of selected micro finance institutions in Buea. The specific objectives of the study were first, to examine whether there is a relationship between data storage and performance, secondly to establish whether a relationship exists between information quality and organizational performance. The study used descriptive survey design with population of the study consisting of the employees (accountants and managers) of the selected micro finance institutions in Buea. Data were collected from 30 respondents using questionnaires. The data were analyzed by SPSS using descriptive statistic and presented in frequency tables.

The study found that there was a significant positive relationship between data storage and performance. The results further disclosed that, there was a positive relationship between information quality and performance of the selected micro finance institutions in Buea.

For the overall results of the effects of accounting information system on performance, the results reveals that accounting information system have an overall significant effect on the performance of selected micro finance institutions in Buea. Thus, the rejection of the null hypothesis and acceptance of the alternative hypothesis that states that “there is a significant relationship between accounting information system and the performance of selected micro finance institutions in Buea municipality.



1.1 Background of the study

      Micro finance is increasingly becoming an important asset class for investors (Biesland, mersland and strom, 2015). Globally, the growth in the micro finance market continues and soon the micro finance sector is expected to become the world’s largest banking market in terms of the number of customers (Bies et al 2015). During the last three decades, micro finance has captured the interest of both academics and policy makers. The industry has been growing at a significant rate and in several countries it has become an important sub-sector of formal financial markets (Asseta, Hermes, and meesters, 2010). According to Robenson (1999), micro finance institutions is defined as a development tool that grants or provides financial service and products such as very small loans, micro savings, micro insurance and money transfer to assist the very or exceptionally poor in expanding or establishing their businesses.

In Cameroon MFIs can be traced as far back as 1963 when the first credit union was established in the north west Region by the St. Anthony’s discussion group (Long, 2009). This idea was introduced at Njinikom in the north west region of Cameroon by a certain Rev. father Anthony Jansen, a Roman catholic priest from Holland. However, it was not until the late 1980’s as a result of commercial banking sector in Cameroon experiencing a serious crises with many major banks becoming illiquid and / or insolvent that micro finance and micro finance institutions gained ground.

On a global note, the microfinance industry has realised important growth rate and as the number of microfinance institutions and customers continue to grow, regulation of the industry becomes a question of interest since the

sustainability of these institutions is highly debated. A more efficient micro financial sector may eventually translate into higher rates of economic growth and thus the ability of governments to alleviate poverty. Despite the increasing regulation of the microfinance sector in Cameroon and the constant efforts being made by the government authorities to enhance the performance of these MFIs, the sector still faces a lot of challenges. Regular news about the microfinance sector in Cameroon is the constant close down of several microfinance establishments or the sudden and spectacular bankruptcy of some MFIs which reduce customers’onfidence.

        The ever growing need for businesses development, growth, and expansion in today’s contemporary business environment has necessitated managers to consider more advanced management strategies targeted at improving decision making in organizations. Most of these strategies are tailored towards sustaining business in wake of rapid technological innovations, increase awareness and challenging demands from customers.

One of such strategies is the adoption of information system within the business organization (Davoren, 2019). Accounting information system therefore is a structure that a business uses to collect, store, manage, process, retrieve, and reports financial data so that it can be used by accountants, consultants, business analyst, managers, chief financial officers, auditors, regulators and tax agencies. The main components of AIS includes people, procedures, data, software, and hardware. Such software include;

The Alpha software, Peachtree, Quick books and Sage software. Accounting information system is as essential as it helps organizations to fulfills its statutory obligations of preparing and publishing certain accounting records. It analyses data and provides reliable and accurate financial information and also protects a firm accounting data from theft. Business started embracing accounting information system during the year 1955 when a company bought their first computer purely for accounting purposes. Accounting practices were streamlined in the 1960’s when the US transportation industry developed the EDI (Electronic data interchange) which was embraced by a lot of companies till then. And around the years 1978 and 1998, the peachtree and quickbooks softwares  introduce respectively. Recently, the objectives of business organizations have shifted from the earlier times which were only working towards profit making and survival. Today, the objectives of business organizations and financial institutions are beyon profit making, but includes; gaining competitive advantage, sustainability, surviving turbulence environment, customer satisfaction and effective decision making. In achieving these objectives, Technology cannot be cut-out. One of the paramount technology systems in financial institutions is Accounting Information System (AIS). AIS contains a series of devices used to undertake a set of common business functions such as accounting, human resources management and stock management. The core nature of comprehensive AIS is to computerize business process and most importantly, to produce data in real-time. The main benefits of an optimal use of AIS in an organizationare: better adaptation to a changing environment, better management of arm’s length transactions and a high degree of competitiveness.

              Organizational performance comprises of the actual output or result of an organization measured against its intended outputs (or goals and objectives). Performance according to Conway (2009) is the activity that guarantees that goals are being met in an efficient way. It is from the financial statements that an organization’s performance can be relied on. Organizational performance can be viewed at in two perspectives that is financial and non-financial performance. Financial performance is used as a general measure of a firm overall financial strength. In this work profitability is the main financial measure to measure a firm’s performance. Though other includes earning per share, profit margin ratios, liquidity, return on capital and return on equity. While non-financial performance is the measure that gives out information on the company’s performance in none-monetary or monetary terms. Though one can’t express non-financial measures in monetary terms, this measure can be quantitative and qualitative. They include: social reporting, clear social objectives, product and service varieties, learning and growth, employee satisfaction, and employee training. So therefore, this research work shall be based on the financial performance of MFIs.

1.2. Statement of the problem

The need of information is basic for concrete decision making and to ensure organizational growth. There has been a remarkable advancement in accounting information system designed for micro finance institutions to adapt for their operation. Adaption of accounting information system by MFIs can resolve and support automation and procession of large amount of data and produce timely, quality, and accurate information. Oguntimehin (2001) submitted that organization performance is the ability to produce desire results. Therefore, this is serious omissions particularly as technology is changing. MFIs need to change to adopt information technology than relying on the use of manual approach of book keeping accounting which can be inefficient and thus, leading to delay in procession of reports, difficulties in retrieving information, poor data quality and storage, delay in decision making regarding investments and low productivity experienced, (Maureen, 2014). However, if accounting information system is not widely adopted by all or many MFIs in Cameroon, most MFIs will remain behind and be out competed by their rival firms or fail (Augustine, Maurine and Jian 2014). The main concern of this research work is to examine the role of AIS on the performance of MFIs in Buea municipality .

1.3. Objective of the study

 1.3.1. Main objective

  • To examine the role of accounting information system in the performance of micro finance institution in Buea municipality.

   1.3.2. Specific objective

  • To ascertain the impact of data storage on performance

  • To determine the relationship between information quality and performance

1.4. Research question

 1.4.1. Main question

  • What is the role of accounting information system in the performance of micro finance institutions in Buea municipality?

1.4.2. Specific question

  • Does data storage affects performance?

  • Is there any relation between information quality and performance?

1.4. Research hypothesis

H0: There is no significant relationship between AIS and the performance of micro finance institutions in Buea municipality.

Ha: There is a significant relationship between AIS and the performance of MFI in Buea municipality.



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