EconPapers    
Economics at your fingertips  
 

Microcredits Management Practices: A Critical Success Factor for Rural and Community Banks

Kofi Owiredu-Ghorman (), Eric Kwame Amponsah Addy, Eric Nsiah Gyabaah and Kwame Oduro Amoako

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2018, vol. 8, issue 1, 167-173

Abstract: Microcredits are the largest assets and the main sources of income to rural and community banks in Ghana. That notwithstanding, microcredit is relevant to rural and community banks in Ghana but it is risky and expensive to manage. Based on a review of extant literature, this study aims to demonstrate how microcredits are managed in rural and community banks. This was achieved by examining literature on the criteria used in managing credit worthy clients, the effectiveness of the loan disbursement procedures, the extent to which the banks educate and supervise the customers and problems encountered in recovering bank loans granted. The review indicates that the bank had higher default rate as a result of the high interest rate and time of making credits available to the beneficiaries, hence, operating far below the expected recovery rate. It was recommended that banks should be mindful of the time they give out credits to the clients to meet the purpose for which loans were taken by the clients. It was also recommended that banks should adopt innovative lending methodologies such as group lending and dynamic lending to joint-liable group to solve the problem of high default rate.

Keywords: Microcredit; rural community banks; Ghana; lending (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://hrmars.com/hrmars_papers/Microcredits_Manag ... _Community_Banks.pdf (application/pdf)
http://hrmars.com/hrmars_papers/Microcredits_Manag ... _Community_Banks.pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:8:y:2018:i:1:p:167-173

Access Statistics for this article

More articles in International Journal of Academic Research in Accounting, Finance and Management Sciences from Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences
Bibliographic data for series maintained by Hassan Danial Aslam ().

 
Page updated 2018-11-10
Handle: RePEc:hur:ijaraf:v:8:y:2018:i:1:p:167-173