Growth and survival strategies for micro finance institutions in the Kumasi Metropolis.

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Date
NOVEMBER, 2015
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Abstract
Ghana in recent times has witnessed an unprecedented era of collapse of MFIs and hence the need for appropriate strategies to ensure the survival and growth of the sector. Examples of such collapsed MFIs are Noble Dream Financial Service and Eden Micro Finance. It is against this backdrop that the current study employs descriptive method to survey 40 managers of MFIs in the Kumasi metropolis using both questionnaire and financial statements. The study sought to explore the potentials of mergers and acquisition as survival strategy for MFIs in the Kumasi metropolis. The result of the study shows that the average clientele size of the MFIs in the Kumasi metropolis has witnessed a decreasing trend over the past three years. The MFIs faces some challenges which includes the probability of panic withdrawal, inadequacy of working capital amongst others. To handle these challenges the MFIs relies on internal growth strategies such as ploughing back of profit, increasing sales of existing products and introducing new products. The MFIs rarely engage in external strategies like acquisition and mergers, and the sale of corporate bonds for growth and survival in the financial market in Ghana. In the phase of the worsening performance, the MF sector recognizes the need for the adoption of external strategies like acquisitions and mergers for growth and survival. The MFIs perceive these strategies necessary to meet the BoGs new banking rate regulation and to recapitalize the firms. The MFIs further perceive M&As as a viable surviving and growth strategy. It is based on these findings that the study recommends aggressive financial product marketing, manpower training and re-training, adoption of M&As and corporate Bond sales.
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A thesis submitted to The Department of Marketing and Corporate Strategy, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Master of Business Administration.
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