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Title: Informal financial institutions and the development of rural economies of Ghana (a case study of Techiman District)
Authors: Bonsu, Eric Mensah
Issue Date: 8-Jul-1997
Series/Report no.: 2322;
Abstract: The effect of the repressive financial policies by the government before the 1980s created distortions in financial market, propelling the rate of increase of the informal financial institutions in the rural areas. The importance of mobilising rural household savings has also been neglected in financial policymaking and in rural development strategies. The rural economies are therefore left at the mercy of the informal lenders and savings collectors. Financial reforms policies were introduced as part of measures to mobilise rural savings and credit delivery as well as integrate the financial market. Accordingly, the extension of branch banks of the commercial banks and the establishment of rural banks in rural areas were affected. The informal institutions continue to attract a sizeable number of the rural population despite the reforms policies. The study sets itself the objective to identify these informal institutions in Techiman with the view to examining their potential and constraints with respect to savings mobilisation, credit delivery, growth and their contribution to the development of the district. Data were collected from both secondary and primary sources. The purposive sampling technique was used to identify respondents because of inadequate records on informal activities in the area that could have served as sample frame. The findings of the study showed that, the informal lenders and savings collectors increased in both assets and clientele. The study findings also identified linkage between the savings collectors and the banks whiles the money lenders had a very weak linkage. The analysis of the study also revealed the immense contribution of the informal financial institutions towards the development of the district and how insensitive the rural people are to interest rate in the district. The study concluded that medium-term measures must be put in place to promote the activities of informal financial institutions whiles searching for a long term strategy to address the financial disintegration as well as mobilising financial resources and credit delivery for the development of rural economies of Ghana. The author is also of the view that policies should explicitly include informal financial institutions and their roles clearly defined in financial policies.
Description: A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of the Degree of Master of Science in National Development Policy and Planning, 1997
URI: http://hdl.handle.net/123456789/3170
Appears in Collections:College of Architecture and Planning

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