Research Student
CHRISTIAN SERVICE UNIVERSITY COLLEGE
BACHELOR OF BUSINESS ADMINISTRATION
RESEARCH TITLE: Challenges facing mobile bankers of microfinance institutions in Ghana
A case study of Eden microfinance institution in the Kumasi metropolis
GROUP MEMBERS INDEX NUMBER
SUPERVISOR
MISS ABIGAIL ASAMOAH
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY * In Ghana it is estimated that only 6 percent of the entire population have access to formal financial services, with the majority being denied access (Basu et al., 2004). These individuals and enterprises therefore tend to rely largely on informal sources, including relatives, friends, suppliers and money lenders, for their financial needs (Aryeetey, 1994).
* Ghana’s financial system is characterised by the co-existence of formal and informal financial markets. The formal financial markets comprise of commercial banks, development banks and credit institutions mainly exist in urban areas and offer a narrow range of financial services. They concentrate on providing working capital mainly to medium and large-scale enterprises. Furthermore, the formal financial institutions are inflexible in their operations, with respect to the needs of the small-scale enterprises and the poor people in the rural areas who may not have collateral or well-written feasibility studies to solicit for loans. The microfinance which is basically informal, involves small-scale credit and savings to meet the needs of poor producers. Microfinance institutions also provide skill-based training to enhance productivity and organizational support, and consciousness-building training to empower the poor. Recent studies show that access to microfinance contributes to poverty reduction, particularly for women participants, and to overall poverty reduction at the village level (Khandkar 2005). * * There are a large number of Susu collectors in the informal sector, who provide collection and safekeeping
BACHELOR OF BUSINESS ADMINISTRATION
RESEARCH TITLE: Challenges facing mobile bankers of microfinance institutions in Ghana
A case study of Eden microfinance institution in the Kumasi metropolis
GROUP MEMBERS INDEX NUMBER
SUPERVISOR
MISS ABIGAIL ASAMOAH
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY * In Ghana it is estimated that only 6 percent of the entire population have access to formal financial services, with the majority being denied access (Basu et al., 2004). These individuals and enterprises therefore tend to rely largely on informal sources, including relatives, friends, suppliers and money lenders, for their financial needs (Aryeetey, 1994).
* Ghana’s financial system is characterised by the co-existence of formal and informal financial markets. The formal financial markets comprise of commercial banks, development banks and credit institutions mainly exist in urban areas and offer a narrow range of financial services. They concentrate on providing working capital mainly to medium and large-scale enterprises. Furthermore, the formal financial institutions are inflexible in their operations, with respect to the needs of the small-scale enterprises and the poor people in the rural areas who may not have collateral or well-written feasibility studies to solicit for loans. The microfinance which is basically informal, involves small-scale credit and savings to meet the needs of poor producers. Microfinance institutions also provide skill-based training to enhance productivity and organizational support, and consciousness-building training to empower the poor. Recent studies show that access to microfinance contributes to poverty reduction, particularly for women participants, and to overall poverty reduction at the village level (Khandkar 2005). * * There are a large number of Susu collectors in the informal sector, who provide collection and safekeeping