Contemporary Challenges and Sustainability of Microfinance Institutions in Ghana

Abstract

Contemporary Challenges and Sustainability of Microfinance Institutions in Ghana Mensah Marfo, James Atta Peprah Ph.D Abstract The paper examined the impact of contemporary challenges on the sustainability of microfinance institutions in Ghana. Employing a cross-sectional survey design, data were collected using self-administered questionnaires. Thirty (36) microfinance institutions across Ghana and sample size of three hundred and thirty-one staff (331) of these institutions were interviewed. Exploratory factor analysis and t-test comparisons were used to analyze the data. Using exploratory factor analysis, the findings revealed that institutional framework, capacity building and funding, regulation and supervision, and coordination challenges were contemporary challenges faced by MFIs in Ghana. With t-test comparison analysis, the findings revealed that four extracted factor dimensions (institutional framework, capacity building and funding, regulation and supervision, and coordination challenges) have a statistically significant negative influence on the sustainability of microfinance. Of the four, supervision and regulations recorded the highest challenge whilst institutional framework recorded the least challenge. It was concluded that the four main contemporary challenges mentioned were the major threats and contributed adversely to the sustainability of microfinance operations in Ghana.The recommendation centered on policy makers‘ strengthening corporate governance to enhance the sustainability and long-term survival of MFIs in Ghana. Full Text: PDF DOI: 10.15640/jeds.v6n4a9