Abstract
Bank of Ghana in 2011 issued Micro Finance Rules and Guidelines with the aim of promoting entrepreneurship activities in micro and small enterprises in Ghana. The study examined the effectiveness of Micro Finance Institutions in promoting entrepreneurs in Accra Metropolis in the period 2011 to 2013. A purposive and simple random sampling technique was employed to draw the sample from the population. Personal interviews and structured questionnaires were used to facilitate the acquisition of relevant data which was used for analysis. Descriptive statistics which involves simple percentage and illustrations was purposefully applied in data presentations and analysis. The research revealed that only a few entrepreneurs had accessed loans from Micro Finance Institutions, due to high interest rates, ignorance of the existence of Micro Finance Institutions as well as lack of trust and confidence in the Micro Finance Institutions. It was concluded that Micro Finance Institutions in Accra Metropolis are less effective in promoting entrepreneurs. The researchers recommended that the Bank of Ghana and Ghana Association of Micro Finance Companies must ensure transparency and integrity in Micro Finance Institutions operations to increase their outreach. In addition, Ghana Association of Micro Finance Companies and its members must enhance public awareness about Micro Finance Institutions operations through various promotional strategies.
Highlights
Micro-finance concept has been in operation for centuries in different parts of the world, for example, “Notable” in Indonesia, “cheetu” in Sri Lanka, “tontines” in Cameroon, “susu” in Ghana and “pasanaku” in Bolivia
The activities of Micro and Small Enterprises (MSEs) in Africa (Rogerson, 2001), is of vital significance for the promotion of socio-economic development, job generation and poverty eradication coupled with policy makers and practitioners current interest in empowerment potential of entrepreneurs makes an assessment of the effectiveness of Ghanaian micro finance institutions (MFIs) in promoting entrepreneurs very significant
The population of the study consist of all tier two (2) MFIs licensed by Bank of Ghana (BOG) as well as being members of Ghana Association of Microfinance Companies (GAMC) and MSEs operating in Accra Metropolitan Assembly (AMA)
Summary
Micro-finance concept has been in operation for centuries in different parts of the world, for example, “Notable” in Indonesia, “cheetu” in Sri Lanka, “tontines” in Cameroon, “susu” in Ghana and “pasanaku” in Bolivia. With Ghana having the highest literacy rate in West Africa subregion at 74.1% (US Department of State and Central Intelligent Agent world fact book: 2012 publication) and with over 7 million of 24.6 million population still living below the poverty line despite Ghana’s current lower middle income status (www.ghanaweb.com) Most of these educated people fail to get employment in the formal sector as a result of collapse of Ghana’s industrial base due to ineffective management, shrinking of public sector employment opportunities coupled with relatively slow growth of the private sector and have employed themselves and other people as entrepreneurs by starting business ventures.
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