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Panel data analysis reveals financial management practices enhance performance in credit unions, indicating the need for improvement in liquidity and asset quality.
Purpose: This study examines how Innovative Financial Risk Management Paradigms or financial management practices affect the financial performance of credit unions in Cameroon. Methodology: The study employs panel data analysis using fixed-effects and random-effects models to address heteroskedasticity, autocorrelation and endogeneity issues. Data from 2021 to 2025 are sourced from audited financial reports of the CamCCUL Network from its nine (09) chapters, with the dependent variable indicators normalized into a financial performance index. Findings: The findings reveal that effective liquidity management and asset quality improvements positively affect financial performance, while higher risk exposure has a detrimental effect. Recommendations: These findings underscore the importance of prudent innovative financial risk management paradigms. The study offers policy recommendations for regulators and managers to strengthen liquidity buffers, improve asset quality and enforce risk controls, thus promoting financial stability and inclusive growth. These contributions highlight the dynamic relationships between financial management and financial performance, emphasizing; compliance, transparency and governance as key to financial resilience in Cameroon and similar developing contexts.
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Ndoh et al. (2025) studied this question.
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