Abstract

This study seeks to investigate the impact of computerized accounting systems on the growth of micro financial institutions in the Buea municipality, case of P $ T Cooperative Credit Union, this study employed Descriptive Survey research design.

Other specifics research objectives were; Examine how computerized accounting systems have influenced growth of P $ T Cooperative Credit Union Buea, to investigate the impact of computerized accounting system has on the performance of Buea P $ T Credit Union, to access the impact training on growth of P $ T Cooperative Credit Union Buea, from here research question were formulated and hypothesis state in both null and alternative form. Purposive sampling technique was used for study with a sample size of 20 staff out of a population of 30 within the Credit Union. Primary data was employed for data collection with the help of questionnaire.

Also, data was analyze using SPSS version 21, data was equally presented in tables and charts. Result of multiple regression indicates that computerized accounting system has a strong positive impact on the growth of P& T cooperative credit union. Also, this study revealed that computerized accounting systems requires high maintenance fees, furthermore, high quality financial reports are generated by Alpha micro finance application software.

The study concluded that computerized accounting systems software (Alpha micro finance application software) are very costly to buy and only few organizations can afford them. Computerized accounting system aids in the examination of banks statements of financial positions to ensure agreement with source documents. Also, the study recommends that P&T should make use of other accounting software such as Global Banking, and QuickBooks.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

The advancements in information technology have eventually led to the introduction of the computerized accounting system in the displacement of manual accounting system in corporate reporting to help produce relevant and faithful representative financial reports for both management and external users for decision making (Greuning, 2006). The advent of technology across the globe has altered the norm of the game and expectations of new mode of economic activities. The norms of inter and transitional trading changed dramatically to admit to increasing number of financial transactions and trade related activities that takes place via the internet and technologically assisted tools (Sam et al, 2012).

The CEMAC regulation defines Microfinance as an activity carried out by an institution that do not have the status of banks of financial institutions as defined in the appendix in the convention of 1992 (17th January) to harmonize and regulate the banking activities in the central African state and which carry out on a regular basis, loan operations and or savings collections and offers specifics financial services to population who mainly operate outside the traditional banking channel.

In Cameroon, first microfinance institution was created in 1963 in Njinikom in the North West Region by Roman Catholic Priest Anthony Jansen a priest from Holland. The relative success of noticed in this institution lead to the creation of CamCCUL in 1968 by 34 credit unions that were already in existence (Zengue, 2006).

From the main purpose of micro finance institutions which is to provide financial and non-financial services to the poor and those excluded from the traditional banking system, we see that there is a need for computerized accounting systems to help the microfinance institution ameliorate the provision of these services to the targeted group of people. Despite the main aim of Micro Finance Institution to provide the aforementioned services, they also need to engage in activities that will generate income to ensure sustainability.

1.2 Problem Statement

As information technologies grow more progressively, manual accounting systems have become gradually inadequate for decision needs (Brecht and Martin, 1996). Consequently, public and private sector firms in both developing and developed economies view computerized accounting systems as a vehicle to ensure effective and efficient information flow in the recording, processing and analysis of financial data.

Effective and efficient, information flow enhances managerial decision-making thereby increasing the firms’ ability to achieve corporate and business. Strategies objectives (Mnasion et al, 2001).

In most MFIs, funds from customers are poorly managed and their accounting systems are in poor order. Many MFIs do not have qualified accountants and they have problems preparing accurate and timely financial reports, which is one of the major customers and stakeholders’ requirements. Furthermore, it has prompted fraudulent activities perpetrated by accountants or accounting practitioners in private companies. All these challenges pose negative repercussions to the overall financial performance of Microfinance. Thus, this study calls for the investigations of the impact of computerized on the performance of MFIs in Cameroon.

Few studies have been done on the effects of computerized accounting systems on the performance of financial institutions. Mwaura (2013), study assessed financial accountability on the performance of non-governmental organizations in Kenya, (Otieno and Oima, 2013) sited the implementation of computerized system in Kisimu county, Kenya. Another study by Byenkya Denis Mark (2011), the study was conducted to assess the impact of computerized accounting on financial reporting in Uganda Breweries Limited.

However, not many of such studies have been conducted to investigate the impact of computerized accounting on the performance of MFIs in Cameroon. It’s against this background that this research sought to examine the effect of the impact of computerized accounting systems on the performance of Buea P $ T Cooperative Credit Union

1.3 Research Question

1.3.1 Main Research Question

What is the impact of computerized accounting systems on the performance of the P $ T Cooperative Credit union Buea?

1.3.2 Specific Research Questions

1. What effect does accurate computerized accounting system has on the growth of P $ T Cooperative Credit Union Buea?
2. Examine the cost/benefits of instituting a computerized accounting system that enhances the growth of the credit union?
3. Does the training outcome on the system influence the growth of the Credit Union?

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