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Code: ASS – 003 Author: Ben Mbai – International Consultant and J. Akwasi – Kuma – National Consultant Quantity: 1 Type: copy Status: 1/1
Introduction
Ghana is located in West Africa with a coastline of 554 kilometers along the Atlantic Ocean has an estimated population of 17.8 million with a growth rate of 3%. 84% of the population is rural. Most of this population is engaged in either agriculture or informal trade. The main constraint in both cases is lack of access to the financial services. The per capita GNP was US$410 in 1995 according to the World Bank.
Rural banks were opened in all parts of the country at the instigation of the Government and financial support from the Bank of Ghana. These have done little in providing access to financial services to micro-entrepreneurs who could only have an alternative from money lenders at an astronomical cost, sometimes at an interest rate of 20% per month with a processing fee of between ₵5,000 and ₵10,000 depending on the region.
The Agricultural Development Bank (ADB), a Government owned bank with branch network all over the country that has served the mainly agro based enterprises is in the process of being privatized like many other government owned financial institutions.
The result of this privatization has created a wide gap for financial accessibility needs and in response several Non-Bank Financial Institutions and Non-Governmental Organizations have come up to provide access for financial services. Most of these institutions are still in the process of designing the appropriate packages to suit the demands of the large potential clientele. Some have already put in “Best Practice Performance” criteria adopted by worldwide practitioners into practice and results are rewarding.
