Influence of Environmental and Governance Factors on Sustainability of Microfinance Institutions in Ghana

This study examines the environmental and governance factors and how they affect sustainability of Microfinance institutions (MFIs) in Ghana. Microfinance institutions like any other system are affected by peculiar environmental and governance factors which determine to a large extent how it survives. The study therefore measures seven variables by testing seven hypotheses from a survey data of 114 MFIs in Ghana. The study revealed that even though there was a positive and significant relationship between sustainability and improved regulatory framework, loan recovery, quality of staff and the MFIs ability to create jobs for their clients, existence of Board of Directors, and increased competition, do not impact on sustainability. Recommendations on how to enhance the environmental and governance factors to ensure sustainability of MFIs have been made. Key words: sustainability, environment, governance, microfinanc

Success of Microfinance Institutions: The Ghanaian Experience

Success in microfinance refers to measures which when adopted will significantly improve the life and operations of the institutions though many authors have different views on what constitute success. The following imperatives have been used to scan success of microfinance institutions (MFIs): acquiring more clients, effective and efficient loan processing, effective record keeping, increased savings, external and internal audits, level of staff remuneration and staff turnover rate. The research was based on both qualitative and quantitative approaches. First, interviews were held with selected CEOs from all the categories of MFIs in Ghana. This was followed by self-administered survey involving 130 microfinance institutions. The results indicated that all the perceived factors were significant in determining the success of MFIs. Key words: Success; Microfinance; Sustainability; Remuneratio

An Evaluation of Sustainability and Subsidy Dependence of Microfinance Institutions in Ghana

The research aims to explore the understanding of the relationship between sustainability of microfinance institutions (MFIs), subsidy dependence index (SDI) and operational self-sufficiency (OSS).The research study is based on initial exploratory study by analyzing data on 14 executive directors in qualitative interviews and 116 relationship executives in research questionnaires. The microfinance institutions identified were the Financial Non-Governmental Organizations (FNGOs), the Savings and Loans Companies (S&L), the Credit Unions (CUs), the Rural Banks (RBs) and the SUSU Companies. Multiple Regressions which allows for the testing of theories or models established a significant relationship between the Operational Self Sufficiency (OSS) and the predictors, especially the drop-out rate of clients and average loans. The Subsidy Dependence Index (SDI) was calculated for the various types of MFIs and the result was a high dependency ratio especially among the FNGOs. Though the dependency is on the decline, it is very slow indicating that most MFIs will depend on subsidies for a very long time to come. Key words: Subsidy dependence; Sustainability; Operational self-sufficiency; Viability; Microfinanc