Stakeholders in the micro-finance sector have been tasked to improve on their performance in order to regain its reputation and confidence by the general public.

microfinance
micro-finance

Events of recent times whereby clients lost their savings among other nefarious activities by some industry players had dented the reputation of the sector, hence the need for a re-branding strategy to regain trust among the informal sector.
Dr Abraham Ato Ahinful, Chief Executive Officer of NAATOA Group of Companies threw the challenge when he opened the ninth annual micro finance conference at the University of Cape Coast (UCC) on Thursday.

The Two-day conference, organised annually by the Faculty of Social Sciences of UCC, is on the theme “The future of Micro-Finance: Sustainable micro-finance institutions and financial inclusion”.

Participants would deliberate on a wide range of issues, including the “Evolution, collapse and sustainability of micro-finance institutions”, Digitisation and financial inclusion”, Regulation and Inclusive Finance” and “Prospects of micro-finance in Ghana”.

READ ALSO:  Less Disadvantaged People of Xinjiang Rise Above Poverty

It would be recalled that the Bank of Ghana (BoG) closed down some micro-finance institutions in the country after customers of DKM micro-finance company and “God is Love Fun Club”, among others, lost their investments running into millions of Cedis.

The move, have had a negative impact on the activities of the sector as confidence levels kept dipping among clients of the informal finance sector.
Dr Ahinful stressed that there was the need for the micro-finance companies to ensure maximum protection of customers while they made analysis of every situation to know the behaviour of the customers they served.

He said micro-finance was the most challenging sector in finance with mounting challenges but a lot could be achieved if stakeholders remained proactive to the challenges and addressed them promptly.

He commended UCC for the proactive initiative to bring industry players, stakeholders, regulators and the academia together to brainstorm on how to better promote financial inclusion and its sustainability in the country.

READ ALSO:  Treasury bills declined in September 2015

Mr Yaw Gyamfi, Executive Director of Ghana Micro-Finance Institutions Network (GHAMFIN) said the micro-finance sector had become a conduit for the provision of financial services to the poor and low income enterprises who would have been rejected by the formal banking system.

He said even though there had been significant growth of outreach by Micro-Finance Institutions (MFIs) since 2006, there were growing concerns about sustainability and inclusion as many MFIs were not able to stay on to realise their intended goal.

The micro-finance landscape in Ghana had changed over the past two decades and activities of micro-finance were no longer exclusive to MFIs due to the emergence of new financial inclusion paradigm with, 9.2 million outreach as of 2016.

Mr Gyammfi urged micro-finance companies in Ghana to take the issue of prudent risk management, adherence to best practices, regulatory framework, corporate governance and technology and innovation seriously as they contributed significantly to the success of micro-finance institutions.
He was optimistic that the conference would contribute significantly to enhance the MFIs sustainability in relation to financial inclusion in Ghana for sustainable economic growth.

READ ALSO:  The Many Advantages Of Employee Benefits Outsourcing

Mr Aex Kwesi Awuah, Acting Managing Director of ARB Apex Bank underscored the need to upgrade the capacity of rural and community banks to transform them into efficient financial institutions that would effectively address the banking needs of communities in which they operated.
He said financial institutions, stakeholders and the academia must collaborate to address the systemic institutional sustainability challenges.

Professor George Oduro, Pro Vice Chancellor of UCC said the impact of micro-finance had been mixed with critical operational challenges leading to adverse outcomes such as collapse of some MFIs.
This, he said called for an urgent need to revisit the future of micro-finance paradigm and regulate MFIs in order to protect clients and ensure financial inclusion.

Source: GNA

LEAVE A REPLY

Please enter your comment!
Please enter your name here