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2018 | OriginalPaper | Chapter

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

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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.

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Footnotes
1
Susu is a traditional way of savings with several variants, the most common of which is where an individual known in the community collects periodic savings from other individuals on the understanding that the total savings will be returned at the end of the specified period, less a commission of a day’s savings. In other variants, people may agree to contribute a specified amount and give the total to one member of a group repeating same by rotation till every member is served each time (Belnye 2012).
 
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Metadata
Title
Ensuring Sanity in Ghana’s Financial Sector: A Focus on Ghana’s Microfinance Institutions
Author
Sam Sarpong
Copyright Year
2018
DOI
https://doi.org/10.1007/978-3-319-70007-6_14

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