Micro and Rural Finance in Ghana : Evolving Industry and Approaches to Regulation

Micro and Rural Finance in Ghana : Evolving Industry and Approaches to Regulation

The note reviews the structure and performance of Ghana's rural, and micro-finance institutions (RMFIs), through a financial system, namely comprising three main categories: formal, semi-formal, and informal systems. It then analyzes the liber...

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Bibliographic Details
Main Authors:	Steel, William F., Andah, David O.
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AFFILIATES AFRICAN DEVELOPMENT BANK BANKING LAW BANKING SYSTEM BANKING SYSTEMS CAPITAL ADEQUACY CAPITAL REQUIREMENT COLLATERAL COMMERCIAL BANKS COMMUNITY BANKS CREDIT UNIONS DEPOSITORS DEPOSITS FINANCE INSTITUTIONS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL POLICIES FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FOREIGN EXCHANGE INADEQUATE SUPERVISION INDIVIDUAL ACCOUNTS INFLATION INSURANCE INSURANCE COMPANIES INTEREST RATES INTERNAL CONTROLS INVENTORY LEASING LEGISLATION LIABILITY LIBERALIZATION LIFE INSURANCE LINKAGES LOAN SIZE MICROFINANCE MONEY SUPPLY PERSONAL SAVINGS POVERTY ALLEVIATION PROGRAMS REGULATORY FORBEARANCE RESERVE REQUIREMENT SAVINGS SAVINGS ACCOUNTS SUSTAINABILITY
Online Access:	http://documents.worldbank.org/curated/en/2004/01/5497610/micro-rural-finance-ghana-evolving-industry-approaches-regulation http://hdl.handle.net/10986/9705

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Summary:	The note reviews the structure and performance of Ghana's rural, and micro-finance institutions (RMFIs), through a financial system, namely comprising three main categories: formal, semi-formal, and informal systems. It then analyzes the liberalization of its financial policies (late 1980s) and the supervision regime, indicating that while Ghana's approach has yielded a wide range of RMFIs, and products - potentially outreaching the poor based on savings mobilization - it has also permitted the easy entry of institutions with weak management, and internal controls. This demonstrates the difficulty in striking the right balance between encouraging entry and innovation, and establishing adequate supervision capacity.