IJLTEMAS International Journal of Latest Technology in Engineering, Management & Applied Science (IJLTEMAS) IJLTEMAS 2278-2540 IJLTEMAS 393 10.51583/IJLTEMAS.2026.150900042 Behavioral Finance Selective Cognitive Biases and SMES Growth in a Fragile Economy: Evidence from Cameroon Noushi Mono Fah Department of management, University of Buea. Cameroon Foh Kamdem Fah Biaka University institute (BUI). Cameroon Foh Tella Fah Societe General Cameroon, SGC Bank. Cameroon Sama Christopher Molem Department of economics, University of Buea. Cameroon 15 9 537 551 14 09 2026 19 09 2026 05 10 2026 Anchoring; Behavioural Finance; Cognitive Biases; Growth; Overconfidence; Regret Aversion; SMEs. Abstract

This paper investigates whether entrepreneurial cognitive biases affect the growth of small and medium-sized enterprises within a fragile economic environment. Drawing on behavioural finance and bounded rationality perspectives, the study tests five biases including overconfidence, anchoring, herding bias, loss aversion, and regret aversion using survey data from 304 enterprises in the South West Region of Cameroon. Ordinary Least Squares regression results show that overconfidence, anchoring, and regret aversion are positive and statistically significant predictors of the growth of Small and Medium Sized enterprises, while herding bias and loss aversion are statistically insignificant. Correlation analysis, multicollinearity assessment (Variance Inflator Factor) and the Breusch–Pagan/Cook–Weisberg test all contribute to the reliability of the estimates. The findings imply that in high-uncertainty settings, selected cognitive biases may function as adaptive heuristics that encourage decisive and calibrated entrepreneurial action.

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