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capital base requirement of GH￠150,000 (￠15,000,000,000 Old currency) demanded by BOG is high and this could kill initiative of individuals and corporate bodies who would have wished to be in micro financing/ crediting business.

As formal sector operators constitute the largest share of the Ghanaian economy and contribute to the household welfare and poverty reduction, their problem in relation to access to credit facilities should be minimized. The cases of default could be reduced when these MFIs take a second look at the services provided to its clients. It has to step up its activities to include a compulsory training and sound management of funds. It could also advise clients on ventures that are profit-laden. This would ensure prompt and effective repayment of loans.

Recommendations of Objective 2

It should be noted that, extending credit alone is not sufficient condition to reduce poverty and improve productivity and income. Therefore, additional intervention that goes hand in hand with micro financing should be implemented. By this the Reference is on securing work place for informal operators, markets for their products, health and educational services, training and skill development, how to develop effective and efficient businesses are all needed and should be given a thought. Government through the Bank of Ghana should intervene in ensuring that the acclaimed economic indicators have a strong bearing on the operation of these MFIs. Bank of Ghana’s prime rate is currently at 24% whilst these MFIs are charging as high as 33% interest rate with a short-Term period of repayment. This has the potential of putting SMEs out of business since it might look as if they are working for these MFIs without any return.

Recommendations of Objective 3

The world has now become a global village and countries are taking advantage of internalization and globalisation to ensuring that commercial activities are on the rise. To this effect, the use of Electronic commerce (popularly referred as e-commerce) has now become the order of the day. Goods and services can now be sold and bought by the click of the mouse. Government and MFIs should streamline activities to ensuring that SMEs beneficiaries are adequately trained on the use of the internet and how to trade on the internet. By this, MFIs stand to benefit through regular deposits and growth in GDP for the government. These MFIs should also strategize ways of ensuring that its staff are adequately equipped and given the necessary skills in tracking down loan defaulters. These institutions should also go the extra mile of collaborating with the Kumasi Metropolitan Assembly to ensure that proper stalls are provided permanently. By this proper data on their whereabouts could be kept and monitored.

Reference:

Air University., (1996): “Sampling and Surveying Handbook”, p 25

Amha, W., (2003): “Microfinance in Ethiopia: Performance, Challenges and Role in Poverty Reduction”, AEMFI Occasional Paper No. 7.

Bigsten, A., B. Kebede, A. Shimeles and M. Tadesse (2003): ‘Growth and Poverty

Reduction in Ethiopia: Evidence from Household Panel Surveys’ World Development 31(1): 87-106.

CGAP (2004): “Financial Institutions with a “Double Bottom Line”: Implications for the Future of Micro finance”, Occasional Paper, No. 8.