The Role of Informal Financial Sector in Capital Mobilisation in Ghana A Case Study of Micro Financing in Ho Municipality for Economic Development
Author(s)
Felix Kwame Nyarko , Kong Yusheng , Ethel Dzidefo Asimah , Dominique Jean Jacques Beraud , Mary Bossman ,
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Abstract
In Ghana, like in other developing countries, microfinance has been acknowledged as a pro-poor development intervention because of its special program models in meeting the special needs of the poor. The Ghanaian informal economic landscape is replete with Micro Finance Institutions (MFIs), which are assumed to have varied orientations and outcomes for their clients. MFIs have long provided microfinance products and services with the expectation of improving the socio-economic and political well-being of the Ghanaian poor. This study explores the role of non-financial institutions in capital mobilization for economic development via poverty reduction. In addition, the study examines the challenges faced by both the MFIs and the beneficiaries in granting and accessing credit. Specific objectives were developed to facilitate the achievement of the study. Qualitative and quantitative methodologies were used to collect primary data from about 100 respondents recruited from the MFIs. The study found that MFIs services serve a perfect platform for petty traders, artisans and SMEs to accumulate capital and raise enough funds to boost their businesses. This is done through daily savings of any amount by the client. The study found out the various savings instruments used by MFIs to attract customers, the various services they provide to the public, their largest categories of borrowers, their clientele base and measures they put in place to reduce their credit interest rate risk. The study came out with recommendations to improve the services and operations of MFIs and also how the beneficiaries can also benefit and utilize the services of MFIs and what government can also do in protecting the citizenry
Keywords
Non-Financial Institution; Capital Mobilization; Economic Development; Poverty Reduction
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