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0 and over with majority of these customers being operators of small and medium scale enterprises (SMEs).

The financial institution must be a member of Ghana Micro Finance Institution Network (GHAMFIN).

The institutions must have been in operation in the Kumasi metropolis for at least five years.

Based on interviews with the selected micro financial institutions, the major beneficiary Small and Medium Scale enterprises were identified. However, due to the significant numbers of SMEs in the metropolis and for the purpose of this research, the focus will be on the groups. In view of this, the sampling frame is the present population of the two (2) MFIs chosen customer base combined. The sampling frame is thus 11,878.

A sample size of 66 has been adopted with a 0.1 Level of Precision. The sample size is calculated with the mathematical model propounded by the Air University of USA (Air University Sampling and Surveying Handbook, 1996: p 25).

n = NZ2 * 0.25

[d2 * (N-1)]+ [Z2 *0.25]

Where, n=sample size, N=sample frame, d=precision level, Z=no. of standard deviation units corresponding to confidence level, 1=mathematical constant. (See Appendix for the calculation of sample size).

The clients of these MFIs who are mainly operators of small and medium scale enterprises were interviewed by means of a Simple Random Sampling technique. This technique has been adopted owing to the varying levels of the population of SMEs involved for each of the identified MFIs under consideration, the sample size was shared among these two (2) MFIs customer base based on the proportionate size of population for each MFIs client. Mathematically, the two MFIs shared the sample size (66) based on the ratio; 1:2 and their corresponding population figures are 3,959 and 7,919 respectively. Therefore, the numbers of questionnaires administered in the two (2) named clients’ base are 22 and 44 for Garden City Savings and Loans Ltd and First Allied Savings and Loans Ltd respectively.

3.4 Profile of the selected micro financial institutions

3.4.1 Garden city savings and loan limited

Garden City Savings and Loans Limited (GCSL) was incorporated as a private limited liability company under the companies code 1963 (Act 179) on 17th September, 1998. GCSL was licensed by the Bank of Ghana on July 5th, 1999 and authorized to carry out the business of non-banking financial institutions under the financial institution (Non-Banking) law 1993 (PNDCL 328). Having complied with the previsions of sections 7 and of the companies’ code, it commenced business on 9th August, 1999. GCSL’s registered main business premises are located in the Trust House at Bantama in Kumasi. It is the third savings and loans company to be established in Kumasi and the seventh to be established in Ghana.

Corporate Objective

Micro and small enterprises play a key role in the development of Ghana’s economy; however, a major obstacle to the growth of this sector is the lack of access to external financing. Thus, the creation of a lasting supply of credit for this client group is a way of promoting economic growth in Ghana. Garden city savings and loans limited was set up with the objective of providing financial services that are specifically tailored to the needs of such client groups