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d to the group. Members who are granted loan facilities are required to maintain compulsory savings accounts with FASL.

Allied Mpontu Loan Scheme: This is a hybrid product that combines attributes of Susu and solidarity group loans. The loan is repayable over a period of six (6) months with repayments made fortnightly. The Susu contributions are made on group or individual basis daily or weekly. After completion of the cycle, customers shall qualify for an FASL Susu loan provided they have not defaulted in the repayment of their Mpontu loans.

5.0 Research Findings and Result Discussions

5.1.1 Performance of GCSL and FASL in retrospect

Over the past five years, GCSL and FASL have expanded their operations with the introduction of new products in the market and have strived to be closer to valued customers in and around the Kumasi metropolis. With branches stretching from New Tafo, Bantama, Tanoso and Adum, this has translated into a major boost to the activities of SMEs. It is estimated that a total of GH￠ 54,846,273.00 was granted out and disbursed as loans to SMEs in the 2007 fiscal year as against GH￠197,675.00 mobilised through savings. Table 1 below exposes the trend of event as far as these two micro financial institutions are concerned. All transactions have been converted to GH￠:

5.3.1 Challenges of GCSL and FASL

Irrespective of the role they play, these MFIs are faced with a number of challenges. These challenges have been outlined below:

Lack of Permanent Structures For Beneficiaries

One of the challenges that have served as a drawback to the operation of these MFIs has to do with beneficiaries’ SMEs operating in temporary structures. Most of these SMEs clients are itinerant hawkers and petty traders who are not stable in terms of their location. They move in accordance with the busy nature of the market and where their goods and services are most needed and patronized. This makes it difficult in tracing their whereabouts. This has accounted for many cases of defaults. Also keeping data on them and their whereabouts has not been easy.

Difficulty in Managing Field Staff

Currently these institutions are saddle with the control of field staff. These field staffs are responsible for the collection of daily Susu. It is difficult to monitor their operation given the safety of monies claimed as deposits. There have been cases where these collectors have run away with funds. Deposits of these MFIs have not corresponded with granted loans because of the small number of field officers. This calls for the deployment of more field officers.

Poor Recovery Rate

There has always been a high risk associated with recovery rate of both FASL and GCSL. Though these institutions are working hard to recover loans, they have not been able to out-do with high incidence of default which has brought the average recovery rate of FASL to about 81.3% over the past couple of years. This is far below the standard of 98% used in measuring micro finance acceptable rate in the world.

6.0 Summary, Conclusion and Recommendations

6.1 Summary of findings

It has always been established that reduction of poverty should not be the sole responsibility of governm