Abstract

Managing liquidity risk is vital for credit unions because they are vulnerable to unexpected and immediate payment demands and operate on a cooperative model, where members are both owners and customers. Even though the CEMAC legislator has taken steps to minimise and eventually manage risks in credit unions, these measures are ineffective. Credit unions in Cameroon today continue to suffer from liquidity risk and are unable to satisfy members’ demands for loans, withdrawal of savings and payment of operational expenses. Through the doctrinal and non-doctrinal research methods, the paper demonstrates that loan delinquency, non-respect for prudential norms and the socio-political crisis in Cameroon, continue to compound liquidity risk in credit unions. The paper recommends that, credit unions should engage in recapitalisation, reorganisation and intensify loan recovery in a bid to effectively manage liquidity risk.

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