Evolution of Microfinance and Poverty Reduction in Ghana
EVOLUTION OF MICROFINANCE AND POVERTY RDUCTIONIN GHANA
BY
JOSEPH TETTEH
OLIVIA GIDIGLO
BENJAMIN TETTEH
JOHN KOFI DORGBEFU
IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF A
BACHELOR’S DEGREE (B. Sc. HONS) IN BUSINESS ADMINISTRATION
OF THE UNIVERSITY OF GHANA BUSINESS SCHOOL, UNIVERSITY OF GHANA, LEGON.
JUNE, 2013 CHAPTER ONE
PROPOSAL
1.0 BACKGROUND TO THE STUDY
Modern microfinance emerged in the 1970s pioneered by – among others – the Grameen and SEWA banks in Asia and partners of ACCION in Latin America (Helms, 2007). In more than thirty years it has gained a reputation for being one of the most effective instruments in fighting poverty globally.
Ghana’s financial sector in the past two decades has undergone a significant transformation especially with the promulgation of PNDC Law 328 of 1993, that allowed the establishment of different types of non-bank financial institutions, including savings and loans companies, finance houses, credit unions, as well as rural and community banks (RCBs). This policy transformation has given rise to a number of microfinance programmes and activities ranging from Government, Donors and NGOs.
The microfinance industry in the early 1980s, was dominated by non-governmental organizations (NGOs) and experimented with innovative programmes in an attempt to address what they perceived as the failure of markets and governments to provide financial services to the poor. These organizations were heavily dependent on external grant funding.
Generally, global perspective on microfinance is changing with even the meaning of the term “microfinance” altered. According to Consultative Group to Assist the Poor (CGAP) as recently as a few years ago, it meant, “… a credit methodology that employs effective collateral substitutes to deliver and recover short-term, working capital loans to micro-entrepreneurs”. Today, the term encompasses a broad spectrum of financial services that includes not only
BY
JOSEPH TETTEH
OLIVIA GIDIGLO
BENJAMIN TETTEH
JOHN KOFI DORGBEFU
IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF A
BACHELOR’S DEGREE (B. Sc. HONS) IN BUSINESS ADMINISTRATION
OF THE UNIVERSITY OF GHANA BUSINESS SCHOOL, UNIVERSITY OF GHANA, LEGON.
JUNE, 2013 CHAPTER ONE
PROPOSAL
1.0 BACKGROUND TO THE STUDY
Modern microfinance emerged in the 1970s pioneered by – among others – the Grameen and SEWA banks in Asia and partners of ACCION in Latin America (Helms, 2007). In more than thirty years it has gained a reputation for being one of the most effective instruments in fighting poverty globally.
Ghana’s financial sector in the past two decades has undergone a significant transformation especially with the promulgation of PNDC Law 328 of 1993, that allowed the establishment of different types of non-bank financial institutions, including savings and loans companies, finance houses, credit unions, as well as rural and community banks (RCBs). This policy transformation has given rise to a number of microfinance programmes and activities ranging from Government, Donors and NGOs.
The microfinance industry in the early 1980s, was dominated by non-governmental organizations (NGOs) and experimented with innovative programmes in an attempt to address what they perceived as the failure of markets and governments to provide financial services to the poor. These organizations were heavily dependent on external grant funding.
Generally, global perspective on microfinance is changing with even the meaning of the term “microfinance” altered. According to Consultative Group to Assist the Poor (CGAP) as recently as a few years ago, it meant, “… a credit methodology that employs effective collateral substitutes to deliver and recover short-term, working capital loans to micro-entrepreneurs”. Today, the term encompasses a broad spectrum of financial services that includes not only