Collapsing Microfinance Institutions in Ghana: An Account of How Four Expanded and Imploded in the Ashanti Region

Authors

Festival Godwin Boateng, Roskilde University, DenmarkFollow
Stephen Nortey, Bank of GhanaFollow
Jonas Asamanin Barnie, Kwame Nkrumah University of Science & TechnologyFollow
Peter Dwumah, Kwame Nkrumah University of Science & TechnologyFollow
Martin Acheampong, University of Duisburg-Essen – GermanyFollow
Eunice Ackom-Sampene, Copenhagen Business School-DenmarkFollow

Abstract

The study inquired into the collapse of four microfinance institutions (MFIs) in the Ashanti Region of Ghana. It was found that the collapses primarily were due to unduly risky, unethical and illegal practices, mismanagement and disregard for due diligence, compounded by external factors like macroeconomic instabilities and panic withdrawals, which then pushed the risk levels of the MFIs beyond the point of containment. The paper argues that the 2013 macroeconomic crisis in Ghana only contributed to the pervasiveness of the collapses – the crisis was not a root cause.

Recommended Citation

Boateng, Festival Godwin; Nortey, Stephen; Asamanin Barnie, Jonas; Dwumah, Peter; Acheampong, Martin; and Ackom-Sampene, Eunice (2016) "Collapsing Microfinance Institutions in Ghana: An Account of How Four Expanded and Imploded in the Ashanti Region," International Journal of African Development: Vol. 3: Iss. 2, Article 5.
Available at: https://scholarworks.wmich.edu/ijad/vol3/iss2/5