This study sought to investigate into the roles being played by MFIs as far the operation of SMEs are concern. The researcher used questionnaires and interviews to collect data from 66 respondents (see appendix 3 pg. 84). From the research it was revealed that during the 2007 fiscal year alone, GCSL and FASL paid over GH¢54,846,273.00 as loans to SMEs as against GH¢197,675.00 mobilised through savings. In other to reach out to more customers, additional branches have been opened in new Tafo, Bantama, Tanoso and Adum. The research also revealed that these MFIs have an effective way of recovering loans with an appreciable rate varying between 90.2% - 96.6%. Though this is encouraging, it has been argued that these rates fall below the international standard of measuring micro finance recovery rate which is 98%. This has accounted for the increasingly falling rate of total loan grants. On the impact of MFIs on poverty reduction, it was established that there has been a positive impact with about 85% of those interviewed admitting they are able to access certain facilities that hitherto they found difficult. The income earnings has considerable increased per week as against the standard of measurement set in the GPRS I (2000), which recognizes all earners of income less than GH90.00 per annum to be poor. Aside the monetary indicators, respondents are also able to meet some of the social indicators of poverty. These improvements were attainable through the additional services provided by these MFIs. According to the research, aside its lending role, it also act in an advisory capacity teaching clients basic accounting book keeping and sound financial management. This has helped in expanding the operation of SMEs and discovery of auxiliary ventures.
Table of Contents
1. CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
1.2 THE RESEARCH PROBLEM
1.3 OBJECTIVES OF THE STUDY
1.4 HYPOTHESIS OF THE STUDY
1.5 IMPORTANCE OF THE RESEARCH.
1.6 LIMITATIONS OF THE RESEARCH
1.7 SCOPE OF THE RESEARCH
1.8 ORGANISATION OF THE RESEARCH
2. CHAPTER TWO
2.1 INTRODUCTION
2.2 THE CONCEPT OF MICRO-FINANCE
2.3 THE NEED FOR MICRO-FINANCING
2.4. DEFINITION AND TYPES OF FINANCIAL INSTITUTIONS
2.4.1 Formal Financial Institution
2.3.2 Semi-Formal Financial institutions
2.4.3 Informal Financial Providers
2.5 COUNTRY EXPERIENCES ON MICRO-FINANCING
2.5.1 Experience of Bangladesh
2.5.2 Experience of some African Countries
2.6 TYPES OF CREDITS/LOANS
2.6.1 Short- Term Loans
2.6.2 Intermediate-Term Loans
2.6.3 Long-Term Loans
2.7 PRECONDITIONS OF MICRO-FINANCING
2.8 DEFINITION AND CONCEPT OF SMES
2.8.1 Characteristics of SMEs
2.8.2 The Ostensible Role of SMEs in an Economy
2.9 Empirical Evidence
3. CHAPTER THREE
3. INTRODUCTION
3.2 DEFINITION OF THE STUDY POPULATION
3.3 METHOD OF DATA COLLECTION
3.4 SAMPLING TECHNIQUE
3.5 DATA ANALYSIS AND PRESENTATION
3.6 PROFILE OF THE SELECTED MICRO FINANCIAL INSTITUTIONS
3.6. GARDEN CITY SAVINGS AND LOAN LIMITED
3.6.1 Corporate Objective
3.6.2 Vision and Mission
3.6.3 Products and Services
3.7.0 FIRST ALLIED SAVINGS AND LOANS LIMITED
3.7.1 Mission and Vision
3.7.2 Products and Services
4. CHAPTER FOUR
4.1 INTRODUCTION
4.2 PERFORMANCE OF GCSL AND FASL IN RETROSPECT
4.2.1 Loan Beneficiaries and Eligibility Criteria
4.2.2 Additional Services Provided
4.3 IMPACT OF MICRO FINANCE
4.3.3 Supervision and Visits from Loan Officers
4.3.4 Contributions of Micro Financing To Poverty Reduction
5. CHAPTER FIVE
5.1 INTRODUCTIONS
5.2 SUMMARY OF FINDINGS
5.2.1 Summary of Findings Objective 1
5.2.2 Summary of Findings Objective 2
5.2.3 Summary of Findings Objective 3
5.3 CONCLUSION
5.3.1 Conclusion of Objective 1
5.3.2 Conclusion of Objective 2
5.3.1 Conclusion of Objective 3
5.4 RECOMMENDATIONS
5.4.1 Recommendations of Objective 1
5.4.2 Recommendations of Objective 2
5.4.3 Recommendations of Objective 3
5.5 CONCLUDING REMARKS
Research Objectives and Themes
This research investigates the role of Micro-Financing Institutions (MFIs) in supporting Small and Medium Scale Enterprises (SMEs) in Kumasi, Ghana, specifically aiming to assess their impact on poverty reduction, evaluate their performance, and identify operational challenges.
- Impact of microfinance on the livelihoods of SME operators.
- Analysis of institutional performance, loan recovery rates, and service provision.
- Identification of operational constraints such as collateral requirements and staffing.
- Evaluation of the contribution of microfinance to employment creation and poverty alleviation.
Extract from the book
1.1 BACKGROUND OF THE STUDY
Poverty within Sub-Saharan Africa can be described as a multi-dimensional problem primarily manifested by factors such as low literacy levels, limited access to resources, health and education services, and high levels of unemployment among the productive population. It can also be described in terms of lack of adequate incomes to meet the basic needs of the poor, vulnerable and powerless people. Poverty is complex in nature and scope and therefore requires multifaceted solutions. There is no single guaranteed strategy or approach to solving the problems associated with poverty.
The Danish International Development Agency admits and therefore outlines that one of the important dimensions along which to study and assess the impact of development interventions is the extent to which they contribute to poverty reduction, or in other words how they enhance the well-being of the poor. This is what most poor people strive after; it is central to the development concerns of many developing countries, and it has increasingly become the overarching objective of many development agencies (Danida, 1996).
The World Bank in its bid to define poverty in its 2006 reports says “Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom. Poverty has many faces, changing from place to place and across time, and has been described in many ways. Most often, poverty is a situation people want to escape. So poverty is a call to action for the poor, wealthy, organizations, agencies, governments and the international community alike; it is a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities” (World Bank; 2006: 2).
Summary of Chapters
CHAPTER ONE: Provides an overview of poverty in Sub-Saharan Africa and outlines the research problem regarding microfinance support for SMEs in Ghana.
CHAPTER TWO: Reviews literature on the concept of microfinance, different types of financial institutions, and the role of SMEs in economic development.
CHAPTER THREE: Details the research methodology, including data collection and sampling techniques used to study two selected micro-financial institutions in Kumasi.
CHAPTER FOUR: Analyzes the performance of GCSL and FASL, including loan recovery, impact on poverty, and challenges faced by the institutions.
CHAPTER FIVE: Summarizes the study's findings, provides conclusions based on the research objectives, and offers recommendations for enhancing microfinance interventions.
Keywords
Ghana, Microfinance, GPRS, SMEs, Poverty Reduction, Economic Development, Financial Institutions, Loan Recovery, Employment Generation, Small and Medium Scale Enterprises, Micro-Credit, Kumasi, Savings Mobilisation.
Frequently Asked Questions
What is the core focus of this research?
This work examines how Micro-Financing Institutions (MFIs) in Kumasi, Ghana, support Small and Medium Scale Enterprises (SMEs) and whether these financial services contribute to poverty reduction.
What are the primary themes discussed in the study?
The study centers on the role of microfinance in business development, the impact of these services on household income, operational challenges for MFIs, and the effectiveness of current lending models.
What is the main research objective?
The goal is to assess the performance of MFIs regarding SME credit, evaluate the impact on SME livelihoods, and identify constraints in their operations to provide evidence-based recommendations.
Which scientific methodology is employed?
The research utilizes quantitative data analyzed via SPSS and Excel, complemented by qualitative interviews with MFI management and 66 SME beneficiaries identified through a Simple Random Sampling technique.
What is covered in the main body of the work?
The main sections cover literature reviews on microfinance and SMEs, institutional profiles of Garden City Savings and Loans (GCSL) and First Allied Savings and Loans (FASL), and an analysis of loan performance and poverty impacts.
Which keywords define this research?
Key terms include Ghana, Microfinance, GPRS, SMEs, Poverty Reduction, Financial Institutions, Loan Recovery, and Employment Generation.
What is the specific finding regarding loan recovery?
The study found that while GCSL and FASL demonstrate effective management with recovery rates between 90.2% and 96.6%, these figures fall short of the international standard of 98%.
How do high interest rates affect the SMEs in the study?
Respondents identified the interest rates (around 33%) as a major disincentive and a significant hindrance to their potential for business expansion and overall success.
- Arbeit zitieren
- Joseph Ato Forson (Autor:in), Faustina Hagan (Autor:in), 2008, Research on micro financing in Ghana, München, GRIN Verlag, https://www.hausarbeiten.de/document/206950
