Investigating the challenges faced by microfinance institutions in Ghana: Evidence from Takoradi

Investigating the challenges faced by microfinance institutions in Ghana: Evidence from Takoradi

Daniel Odoom, Kennedy Oppong Fosu, Kwadwo Ankomah, Marian Birago Amofa

Micro Finance Institutions (MFIs) contribute immensely to the economy of every nation. Particularly, within the informal sector, MFIs constitute the pivot around which many financially disadvantaged individuals rely on in terms of access to finance for their businesses. MFIs play a tremendous role in the poverty reduction and employment creation agenda of many nations including Ghana. Notwithstanding the immense role MFIs play in the economies of nations, there is a wide recognition of the fact that the institutions can perform better if they are able to overcome the challenges they face in their operations. However, in order for MFIs to effectively tackle the challenges they encounter, it is important for them to first identify and appreciate these challenges and the threats they pose to the effectiveness of their operations. Within this context, this study sought to explore the challenges MFIs in Ghana face, with particular emphasis on those operating in Takoradi. The study was quantitative, with descriptive survey as the design. Managers and employees of MFIs located in the city licensed by the Bank of Ghana were involved in the study. Simple random sampling method was used to select 114 respondents for the study and questionnaire was relied upon for data collection. The researchers used frequencies, percentages, an independent samples t-test and ANOVA as tools for data analysis. The study observed that increased competition in the industry, low repayment rates, higher cost of information technology, low level knowledge of operators, inadequate and expensive infrastructure base, high capital requirements, unfavourable regulation and …

International Institute for Science, Technology and Education (IISTE)

2019

https://scholar.google.com/citations?view_op=view_citation&hl=en&user=QN2MUMkAAAAJ&citation_for_view=QN2MUMkAAAAJ:u5HHmVD_uO8C

English