Ensuring Sanity in Ghana’s Financial Sector: A Focus on Ghana’s Microfinance Institutions

Sam Sarpong

Chapter Chapter 14 in Corporate Governance in Banking and Investor Protection, 2018, pp 287-301 from Springer

Abstract: Abstract The performance of Microfinance Institutions (MFIs) in Ghana has not, to say the least, created the much-touted messianic role it was meant to play. The scale of the malfeasance in this sector in the last 5 years has been quite steep. Loose regulations, massive failure of governance, both within the sector itself and at the level of the regulators and supervisors, poor supervision, inadequate enforcement, perverse incentives, and other practices bordering on sheer criminality have constituted the main problems slashing away the gains of this sector. What was supposed to help reduce poverty among the poor in society is fleecing them from the little that they lay claim to. Some MFIs have now fraudulently folded up after collecting huge deposits from customers, others, meanwhile, have diverted their funds into unrelated activities with some directors facing legal action from aggrieved customers. The chapter examines the drawbacks within the MFI sector in particular and the financial sector in general. It also presents the gamut of issues at play and the doggedness of the central bank to put the sector on a sound footing.

Keywords: Microfinance Institutions (MFIs); Financial servicesFinancial Services; loansLoans; Higher Interest ratesInterest Rates; depositsDeposits (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:csrchp:978-3-319-70007-6_14

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DOI: 10.1007/978-3-319-70007-6_14

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